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A Differential R&D Game: Implications for Knowledge-Based Growth Models

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  • D. Vencatachellum

    (Institut d'économie appliquée, École des Hautes Études Commerciales)

Abstract

This paper compares the outcomes of strategic and nonstrategic research and development (R&D). Firms undertake cost-reducing R&D in an environment where benefits accrue from their rivals' R&D via a common pool of knowledge. We demonstrate that multiple suboptimal equilibria exist; under these conditions, growth models which do not consider strategic interactions will overestimate or underestimate the growth rate.

Suggested Citation

  • D. Vencatachellum, 1998. "A Differential R&D Game: Implications for Knowledge-Based Growth Models," Journal of Optimization Theory and Applications, Springer, vol. 96(1), pages 175-189, January.
    • Handle: RePEc:spr:joptap:v:96:y:1998:i:1:d:10.1023_a:1022623419371
    DOI: 10.1023/A:1022623419371
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    References listed on IDEAS

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    Cited by:

    1. S. Luckraz, 2008. "Process Spillovers and Growth," Journal of Optimization Theory and Applications, Springer, vol. 139(2), pages 315-335, November.
    2. K. Hori & A. Shibata, 2010. "Dynamic Game Model of Endogenous Growth with Consumption Externalities," Journal of Optimization Theory and Applications, Springer, vol. 145(1), pages 93-107, April.
    3. Rowat, Colin, 2007. "Non-linear strategies in a linear quadratic differential game," Journal of Economic Dynamics and Control, Elsevier, vol. 31(10), pages 3179-3202, October.
    4. Fujiwara, Kenji, 2012. "Voracity, growth, and welfare," Economics Letters, Elsevier, vol. 116(1), pages 11-14.

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