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Dynamic Patent Races with Absorptive Capacity: An Experimental Investigation on R&D Behavior

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  • Sinda Kassab
  • Huan Xie

Abstract

We report a laboratory experiment on dynamic patent races in an indefinite horizon with complete information. In a competitive environment, we analyze the R&D investment behavior of players who are randomly and anonymously paired in each race. We vary subjects’ initial positions as leader/follower or symmetric/asymmetric, as well as the distance between the initial knowledge stock and the target. Our results show that individual average effort is highest for players in a tie position, followed by leaders, and lowest for followers. Starting as a follower (leader) leads to a lower (higher) chance of winning the race. Spillovers realized in the previous round significantly increase players’ investment in the current round. Convergence toward equilibrium play becomes more pronounced in the second half of the sessions. Efficiency loss is significantly higher in races starting from a symmetric position than from an asymmetric position and is also significantly higher in the low treatment than in the high treatment. Nous présentons une expérience de laboratoire sur les courses aux brevets dynamiques dans un horizon indéfini avec une information complète. Dans un environnement concurrentiel, nous analysons le comportement d'investissement en R&D des joueurs qui sont appariés de manière aléatoire et anonyme dans chaque course. Nous faisons varier les positions initiales des sujets (leader/suiveur ou symétrique/asymétrique), ainsi que la distance entre le niveau de connaissance initial et la cible. Nos résultats montrent que l'effort individuel moyen est le plus élevé pour les joueurs en position d'égalité, suivis par les leaders, et le plus faible pour les suiveurs. Commencer en tant que suiveur (leader) conduit à une chance plus faible (plus élevée) de gagner la course. Les retombées réalisées lors du tour précédent augmentent de manière significative l'investissement des joueurs dans le tour en cours. La convergence vers le jeu d'équilibre devient plus prononcée dans la seconde moitié des sessions. La perte d'efficacité est significativement plus élevée dans les courses commençant à partir d'une position symétrique qu'à partir d'une position asymétrique et est également plus élevée dans le traitement faible que dans le traitement élevé.

Suggested Citation

  • Sinda Kassab & Huan Xie, 2025. "Dynamic Patent Races with Absorptive Capacity: An Experimental Investigation on R&D Behavior," CIRANO Working Papers 2025s-08, CIRANO.
    • Handle: RePEc:cir:cirwor:2025s-08
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    More about this item

    Keywords

    Patent race; absorptive capacity; knowledge accumulation; efficiency loss; experimental investigation; Course aux brevets; capacité d'absorption; accumulation de connaissances; perte d'efficacité; enquête expérimentale;
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