It is shown that asymmetry in R&D efficiency between firms is an important factor determining feasibility of the preemption and attrition scenarios in competitive R&D with time to build. Scenarios of attrition and preemption games are most likely to occur when competitors have similar R&D efficiencies. In case of largely asymmetric firms the games of attrition and preemption are very unlikely, thus the R&D duration choices of firms are determined by the actual trade-off between the benefits of earlier innovation and the costs of faster R&D project completion.
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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number
2007-38.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D21 - Microeconomics - - Production and Organizations - - - Firm Behavior O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
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Reinganum, Jennifer F., .
"Dynamic Games of Innovation,"
Working Papers
287, California Institute of Technology, Division of the Humanities and Social Sciences.
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