Understanding perpetual R&D races

Arbeitspapier

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 whether technological competition is sustained, or converges into a market structure with an entrenched leadership and lower aggregate R&D. The subjects' strategies are far less sensitive. In most treatments, the R&D races tend to converge to entrenched leadership. Investment is highest when rivals are close. This stylized fact, and so the usefulness of neck-to-neck competition in general, is largely unrelated to rivalry concerns but can be explained using a quantal response extension of Markov perfection.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CeDEx Discussion Paper Series ; No. 2008-04

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Design of Experiments: Laboratory, Individual ; Innovation and Invention: Processes and Incentives
• Subject: R&D race ; innovation ; dynamics ; experiment ; Forschungs- und Technologiepolitik ; Betriebliche Forschung ; Entscheidung bei Unsicherheit ; Innovationswettbewerb ; Markovscher Prozess ; Gleichgewichtsstabilität ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Breitmoser, Yves ; Tan, Jonathan H. W. ; Zizzo, Daniel John
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx)
• (where): Nottingham
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/67968
• Last update: 10.03.2025, 11:43 AM CET