Strategic R&D with Knowledge Spillovers and Endogenous Time to Complete

Peter Kort, Ruslan Lukach and Joseph Plasmans ()

No 2027, CESifo Working Paper Series from CESifo

Abstract: We present a model where firms make competitive decisions about the optimal duration (or time to build) of their R&D projects. Choosing its project’s duration, the firm can choose to become a leader or a follower, based on its R&D efficiency, the size of the R&D to be carried out and the degree of innovation, which this research will produce. It is shown that asymmetry in R&D efficiency between firms is an important factor determining feasibility of the preemption and attrition scenarios in competitive R&D with time to build. Scenarios of attrition and preemption games are most likely to occur when competitors have similar R&D efficiencies. In case of largely asymmetric firms the games of attrition and preemption are very unlikely, thus the R&D duration choices of firms are determined by the actual trade-off between the benefits of earlier innovation and the costs of faster R&D project completion.

Keywords: R&D investment; competition; preemption; attrition (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Strategic R&D with Knowledge Spillovers and Endogenous Time to Complete (2007)
Working Paper: Strategic R&D with Knowledge Spillovers and Endogenous Time to Complete (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2027

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