Understanding perpetual R&D races

Breitmoser, Yves, Tan, Jonathan H. W. and Zizzo, Daniel John (2010) Understanding perpetual R&D races. Economic Theory, 44 (3). pp. 445-467.

Full text not available from this repository.

Abstract

This paper presents an experimental study of dynamic indefinite horizon R&D races with uncertainty and multiple prizes. The theoretical predictions are highly sensitive: small parameter changes determine if we should expect technological competition, and if so whether it is sustained, or if the market converges into one with entrenched leadership and lower aggregate R&D. The subjects’ strategies are far less sensitive. In most of the treatments, the R&D races tend to converge to entrenched leadership. We propose and apply a quantal response extension of Markov perfection that is qualitatively and largely quantitatively consistent with the experimental observations.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > School of Economics
Depositing User:	Gina Neff
Date Deposited:	17 Jan 2011 11:18
Last Modified:	12 Jan 2024 01:20
URI:	https://ueaeprints.uea.ac.uk/id/eprint/19343
DOI:	10.1007/s00199-009-0487-4

Actions (login required)

View Item