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Robust Policy Schemes for Differential R&D Games with Asymmetric Information

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  • Anton Bondarev

    (University of Basel)

Abstract

I consider a general differential R&D game with finite set of firms which may generate a multiplicity of strategically driven outcomes like prevention of entry or strategic delay. It is assumed that while interacting firms are fully aware of their potentials, the government is uncertain over the true state of the industry and thus may be unable to predict such strategic behavior. The choice function over the set of potential outcomes is defined, and robust welfare optimal and individually optimal regimes are compared. The belief of the planner over the market shapes the set of potential policy schemes. The ordering of such schemes with respect to uncertainty, costs and welfare-improving potential is established. At last, the optimal level of robustness for a given policy is found.

Suggested Citation

  • Anton Bondarev, 2019. "Robust Policy Schemes for Differential R&D Games with Asymmetric Information," Dynamic Games and Applications, Springer, vol. 9(2), pages 391-415, June.
    • Handle: RePEc:spr:dyngam:v:9:y:2019:i:2:d:10.1007_s13235-018-0286-2
    DOI: 10.1007/s13235-018-0286-2
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    More about this item

    Keywords

    Axiom of choice; Strategic interaction; Robust policy sets; Welfare ordering; Optimal robustness;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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