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Search duplication in research and design spaces — Exploring the role of local competition

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  • Konrad, Kai A.

Abstract

A lack of sufficient diversification in research strategies has been identified as an important problem for delegated research. We show that this problem can be solved by local competition (such as bribery, lobbying, rent seeking, competition at the patent office) among players who apply the same search strategies or develop the same design. Such competition can restore full efficiency in the non-cooperative equilibrium. Local competition interacts with the choice of whether to cluster or diversify, and rather than adding a further inefficiency to the existing ones, it eliminates inefficiency. The results are robust and hold under simultaneous search strategy choices as well as for sequential choices.

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  • Konrad, Kai A., 2014. "Search duplication in research and design spaces — Exploring the role of local competition," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 222-228.
    • Handle: RePEc:eee:indorg:v:37:y:2014:i:c:p:222-228
    DOI: 10.1016/j.ijindorg.2014.10.002
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    Citations

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    Cited by:

    1. Bavly, Gilad & Heller, Yuval & Schreiber, Amnon, 2022. "Social welfare in search games with asymmetric information," Journal of Economic Theory, Elsevier, vol. 202(C).
    2. Thomas Greve & Hans Keiding, 2023. "A model of privately funded public research," Journal of Economics, Springer, vol. 140(1), pages 63-91, September.
    3. Kai A. Konrad, 2023. "The Geoeconomics of Trade Infrastructure and the Innovation Competition between China and the US," Working Papers tax-mpg-rps-2023-14, Max Planck Institute for Tax Law and Public Finance.
    4. Bose, Gautam & Konrad, Kai A., 2020. "Devil take the hindmost: Deflecting attacks to other defenders," Reliability Engineering and System Safety, Elsevier, vol. 204(C).
    5. Schmutzler, Armin & Letina, Igor, 2015. "Designing Innovation Contests for Diversity," CEPR Discussion Papers 10736, C.E.P.R. Discussion Papers.
    6. Igor Letina & Armin Schmutzler, 2019. "Inducing Variety: A Theory Of Innovation Contests," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1757-1780, November.
    7. de Roos, Nicolas & Matros, Alexander & Smirnov, Vladimir & Wait, Andrew, 2018. "Shipwrecks and treasure hunters," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 259-283.
    8. Matros, Alexander & Smirnov, Vladimir, 2016. "Duplicative search," Games and Economic Behavior, Elsevier, vol. 99(C), pages 1-22.
    9. Matthias Verbeck & Elisabeth Schulte, 2016. "Contracting with Researchers," MAGKS Papers on Economics 201620, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    Delegated research; Clustering; Product design; Design contest; Search strategy; Rent seeking;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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