Rent-Seeking in Research Markets
Using a standard model of uncertain innovation, this paper examines research rivalry and rent-seeking rivalry in innovation markets. Previous literature has not considered the implications of rent-seeking in research markets. We find that greater rent-seeking by the rival unambiguously lowers own profit-maximizing research and rent-seeking activity. On the other hand, greater research spending by the rival also lowers own research and rent-seeking, especially when the probability of own innovation is low. Policy implications are discussed. Copyright 2003 by Kluwer Academic Publishers
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