TECHNOLOGICAL FAILURE, ECONOMIC SUCCESS

Hans Haller () and Anthony Pavlopoulos
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Hans Haller: Department of Economics, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061-0316, USA
Anthony Pavlopoulos: Ministry of Transportation, 60 Loeforos Kifissias, 7th Floor, 15125 Athens, Greece

International Game Theory Review (IGTR), 2002, vol. 04, issue 04, 415-434

Abstract: A research lab has private information about failed test results. There is a finite group of potential participants in a patent race to whom this information is valuable, since it reduces research costs. The lab acts as a Stackelberg leader in a strategic game of informational rent extraction. The lab's optimum is also (constrained) socially optimal in that the lab sells all its information to all the firms. Posting a uniform per unit (per test result) price suffices to achieve that outcome.

Keywords: Informational rent; patent race; R&D (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0219198902000781

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