Closed-loop equilibrium in a multi-stage innovation race

B-Tier
Journal: Economic Theory
Year: 2003
Volume: 21
Issue: 2
Pages: 673-695

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We examine a multistage model of an R&D race where players have multiple projects. We also develop perturbation methods for general dynamic games that can be expressed as analytic operators in a Banach space. We apply these perturbation methods to solve races with a small prize. We compute second-order asymptotically valid solutions for equilibrium and socially optimal decisions to determine qualitative properties of equilibrium. We find that innovators invest relatively too much on risky projects. Strategic reactions are ambiguous in general; in particular, a player may increase expenditures as his opponent moves ahead of him. Copyright Springer-Verlag Berlin Heidelberg 2003

Technical Details

RePEc Handle
repec:spr:joecth:v:21:y:2003:i:2:p:673-695
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25