Competitive investing equilibrium under a procurement mechanism

Heng Zhang, Ming Yang, Jiye Bao and Pu Gong

Economic Modelling, 2013, vol. 31, issue C, 734-738

Abstract: This paper proposes a procurement mechanism for a research and development (R&D) project, in which the stochastic nature of R&D is incorporated, and the potential agents needed to invest prior to the agent are selected. The incentive contract aims to attract the investment of potential agents through a sharing rate. By establishing the stopping time game, an optimal investing strategy for potential agents is derived. Furthermore, the investment equilibria are discussed, and the conditions under which the equilibrium represents preemption or simultaneous investment are presented.

Keywords: Procurement mechanism; R&D investment; Stopping time game; Equilibrium strategy (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:31:y:2013:i:c:p:734-738

DOI: 10.1016/j.econmod.2013.01.025

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