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Stability in the patent race contest of Lee and Wilde

Author

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  • Kofi O. Nti

    (Department of Management Science and Information Systems, The Pennsylvania State University, University Park, PA 16802-1913, USA)

Abstract

To determine how expenditure and profits vary with the number of firms in the patent race contest of Lee and Wilde, it is traditional to impose an ad-hoc stability condition on the best response function. This paper relates the stability condition to the standard myopic adjustment mechanism and shows that a concave hazard rate function with non- increasing hazard rate elasticity is sufficient for the analysis. We provide examples and reveal additional qualitative properties of the Lee and Wilde model.

Suggested Citation

  • Kofi O. Nti, 1999. "Stability in the patent race contest of Lee and Wilde," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(1), pages 237-245.
    • Handle: RePEc:spr:joecth:v:14:y:1999:i:1:p:237-245
    Note: Received: November 15, 1996; revised version: March 25, 1998
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    Citations

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    Cited by:

    1. Beauchêne, D., 2019. "Is ambiguity aversion bad for innovation?," Journal of Economic Theory, Elsevier, vol. 183(C), pages 1154-1176.
    2. Marco Runkel, 2003. "Optimal Contest Design when the Designer’s Payoff Depends on Competitive Balance," CESifo Working Paper Series 1009, CESifo.
    3. Kukuk Martin & Stadler Manfred, 2005. "Market Structure and Innovation Races / Marktstruktur und Innovationsrennen: An Empirical Assessment Using Indirect Inference / Eine empirische Untersuchung mit Hilfe der indirekten Schätzmethode," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(4), pages 427-440, August.
    4. Danmo Lin, 2023. "Accelerability vs. Scalability: R&D Investment Under Financial Constraints and Competition," Management Science, INFORMS, vol. 69(7), pages 4078-4107, July.

    More about this item

    Keywords

    Stability · Patent race contests · Lee and Wilde model.;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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