We consider a differential game of R&D competition and explore the impact of rivalry on the firms' investment behavior over time. Using closed-loop strategies and hence allowing for strategic interactions among rival firms we show that R&D spending by the individual competitor is increased due to competition in the race for priority. This leads us to argue that competitive encounters enhance R&D activities at the same time as increasing efficiency in the race for a technological breakthrough.
|Uncontrolled Keywords:||R&D; Industrial organization; Stragegic interaction; Dynamic games|
|Research Programs:||World Population (POP)|
|Bibliographic Reference:||Journal of Evolutionary Economics; 3(2):145-152 (June 1993)|
|Depositing User:||IIASA Import|
|Date Deposited:||15 Jan 2016 02:02|
|Last Modified:||23 Feb 2016 13:15|
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