Preemptive Search and R&D Clustering
While many preceding studies discuss the equilibrium intensity of R&D, this article focuses on its equilibrium direction. There can be a pure-strategy equilibrium in which multiple firms "cluster," i.e., attempt to develop the same technology even if (i) potential technologies are ex ante equally promising, (ii) each technology can be patented by no more than one firm, and (iii) there are no informational spillovers among firms. Economic applications of this clustering result are not confined to R&D. Any situation where agents are racing in search of exclusive economic opportunities can be an example of this model.
Volume (Year): 29 (1998)
Issue (Month): 2 (Summer)
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