Innovation Races with the Possibility of Failure
The standard innovation race specification assumes a memoryless exponential distribution for the time to success of an R&D project. This specification implies that a project succeeds, eventually, with probability one. We introduce a positive probability that an R&D project fails. With this modified specification, we compare the non-cooperative and cooperative R&D in terms of innovation effort, consumer surplus, and net social welfare.
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|Date of revision:||Aug 2011|
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- Duso, Tomaso & Röller, Lars-Hendrik & Seldeslachts, Jo, 2012.
"Collusion through joint R&D: An empirical assessment,"
DICE Discussion Papers
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- repec:cup:cbooks:9780521022583 is not listed on IDEAS
- Jeroen Hinloopen, 1997. "Subsidizing cooperative and noncooperative R&D in duopoly with spillovers," Journal of Economics, Springer, vol. 66(2), pages 151-175, June.
- Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
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