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Nota técnica 2: A simple search model applied to R&D

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  • Jaime Vatter

Abstract

There are several papers that use the simple search paradigm to analyze R&D investment. Here the firm invests a fixed amount each period, at the end of which, the value of the innovation is determined. Having this information available, the firm decides whether to stop the R&D project or not, i.e., to accept or reject what that period offers. The purpose of this note is to describe the simple search model in the R&D cases, as well as to elaborate on some of the implications of the model. It is of particular interest to compare two frameworks for subsidies; one based on the cost of R&D and the other on the benefits obtained from it.

Suggested Citation

  • Jaime Vatter, 1993. "Nota técnica 2: A simple search model applied to R&D," Estudios de Economia, University of Chile, Department of Economics, vol. 20(1 Year 19), pages 205-212, June.
    • Handle: RePEc:udc:esteco:v:20:y:1993:i:1:p:205-212
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    Keywords

    R&D.;

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