Research among Copycats: R&D, Spillovers, and Feedback Strategies

Grega Smrkolj and Florian Wagener

No 14-112/II, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We study a stochastic dynamic game of process innovation in which firms can initiate and terminate R&D efforts and production at different times. We discern the impact of knowledge spillovers on the investments in existing markets, as well as on the likely structure of newly forming markets, for all possible asymmetries between firms. While an increase in spillovers may improve the likelihood of a competitive market, it may at the same time reduce the level to which a technology is developed. We show that the relation between spillovers, R&D efforts, and surpluses depends on relative as well as absolute efficiency of firms. High spillovers are not necessarily pro-competitive as they can make it harder for the laggard to catch up with the technology leader.

Keywords: Process innovation; R&D; Spillovers; Differential game; Feedback Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C63 C73 D43 D92 L13 O31 (search for similar items in EconPapers)
Date: 2014-08-22, Revised 2017-06-22
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Research among copycats: R&D, spillovers, and feedback strategies (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20140112

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