Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/matcom/v57y2001i1p19-28.html
   My bibliography  Save this article

On the efficiency of the parallel path R&D approach: a stochastic game analysis

Author

Listed:
  • Mehrez, Abraham
  • Justman, Moshe
Abstract
This paper explores the economic performance of the parallel path R&D approach to product innovation in the absence of patent protection. This is done within the context of a formal model in which competitive innovation is characterized as a dynamic game. The dynamic programming approach used by Aldrich and Morton [Manage. Sci. 21 (1975) 491] in the single firm case is extended here to a multi-firm market. Various measures (the expected net present value (ENPV) of total surplus and of profits, and the mean time to first innovation) are evaluated under different market structures. The study includes simulation analysis of the model.

Suggested Citation

  • Mehrez, Abraham & Justman, Moshe, 2001. "On the efficiency of the parallel path R&D approach: a stochastic game analysis," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 57(1), pages 19-28.
    • Handle: RePEc:eee:matcom:v:57:y:2001:i:1:p:19-28
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378475400002822
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Reinganum, Jennifer F., 1981. "Dynamic games of innovation," Journal of Economic Theory, Elsevier, vol. 25(1), pages 21-41, August.
    3. Justman, Moshe & Mehrez, Abraham, 1984. "A closed loop analysis of competitive innovation," Economics Letters, Elsevier, vol. 16(3-4), pages 339-344.
    4. Partha Dasgupta & Joseph Stiglitz, 1980. "Uncertainty, Industrial Structure, and the Speed of R&D," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 1-28, Spring.
    5. Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(3), pages 383-401.
    6. Carole Aldrich & Thomas E. Morton, 1975. "Optimal Funding Paths for a Class of Risky R&D Projects," Management Science, INFORMS, vol. 21(5), pages 491-500, January.
    7. Reinganum, Jennifer F, 1982. "A Dynamic Game of R and D: Patent Protection and Competitive Behavior," Econometrica, Econometric Society, vol. 50(3), pages 671-688, May.
    8. Christopher Harris & John Vickers, 1987. "Racing with Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(1), pages 1-21.
    9. Kamien, Morton I & Schwartz, Nancy L, 1975. "Market Structure and Innovation: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(1), pages 1-37, March.
    10. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 429-436.
    11. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-121, January.
    12. Christopher Harris & John Vickers, 1985. "Perfect Equilibrium in a Model of a Race," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(2), pages 193-209.
    13. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 395-410.
    14. Morton I. Kamien & Nancy L. Schwartz, 1978. "Potential Rivalry, Monopoly Profits and the Pace of Inventive Activity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(3), pages 547-557.
    15. Morton I. Kamien & Nancy L. Schwartz, 1976. "On the Degree of Rivalry for Maximum Innovative Activity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(2), pages 245-260.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aldieri, Luigi & Aprile, Maria Carmela & Vinci, Concetto Paolo, 2015. "R&D Spillovers Effects on strategic behaviour of Large International Firms," MPRA Paper 63402, University Library of Munich, Germany.
    2. Nguyen, Thang, 2004. "Technological Progress in Races for Product Supremacy," MPRA Paper 235, University Library of Munich, Germany, revised 18 Jul 2006.
    3. Richard Gilbert, 2006. "Looking for Mr. Schumpeter: Where Are We in the Competition-Innovation Debate?," NBER Chapters, in: Innovation Policy and the Economy, Volume 6, pages 159-215, National Bureau of Economic Research, Inc.
    4. AMIR, Rabah, 2001. "Stochastic games in economics and related fields: an overview," LIDAM Discussion Papers CORE 2001060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Thijssen, J.J.J., 2003. "Investment under uncertainty, market evolution and coalition spillovers in a game theoretic perspective," Other publications TiSEM 672073a6-492e-4621-8d4a-0, Tilburg University, School of Economics and Management.
    6. Matros, Alexander & Smirnov, Vladimir, 2016. "Duplicative search," Games and Economic Behavior, Elsevier, vol. 99(C), pages 1-22.
    7. Harabi, Najib, 1994. "Technischer Fortschritt in der Schweiz: Empirische Ergebnisse aus industrieökonomischer Sicht [Technischer Fortschritt in der Schweiz:Empirische Ergebnisse aus industrieökonomischer Sicht]," MPRA Paper 6725, University Library of Munich, Germany.
    8. Benjamin Rene Kern & Juan Manuel Mantilla Contreras, 2014. "Mergers and the Incentives to Undertake Product Innovation Oriented R&D: First Steps Towards an Assessment Approach," MAGKS Papers on Economics 201417, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    9. David Gill, 2008. "Strategic Disclosure of Intermediate Research Results," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(3), pages 733-758, September.
    10. de Roos, Nicolas & Matros, Alexander & Smirnov, Vladimir & Wait, Andrew, 2018. "Shipwrecks and treasure hunters," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 259-283.
    11. Meng, Rujing, 2008. "A patent race in a real options setting: Investment strategy, valuation, CAPM beta, and return volatility," Journal of Economic Dynamics and Control, Elsevier, vol. 32(10), pages 3192-3217, October.
    12. Stadler, Manfred, 1998. "On the role of information in dynamic games of R&D," Tübinger Diskussionsbeiträge 132, University of Tübingen, School of Business and Economics.
    13. Committee, Nobel Prize, 2014. "Market power and regulation (scientific background)," Nobel Prize in Economics documents 2014-2, Nobel Prize Committee.
    14. Pelin G. Canbolat & Boaz Golany & Inbal Mund & Uriel G. Rothblum, 2012. "A Stochastic Competitive R&D Race Where “Winner Takes All”," Operations Research, INFORMS, vol. 60(3), pages 700-715, June.
    15. Nelson, Kelly P. & Parton, Lee C. & Brown, Zachary S., 2022. "Biofuels policy and innovation impacts: Evidence from biofuels and agricultural patent indicators," Energy Policy, Elsevier, vol. 162(C).
    16. Leibowicz, Benjamin D., 2018. "Welfare improvement windows for innovation policy," Research Policy, Elsevier, vol. 47(2), pages 390-398.
    17. Levin, Mark (Левин, Марк) & Matrosova, Kseniya (Матросова, Ксения), 2017. "Development and Analysis of Economic Models of Innovation Incentives [Разработка И Исследование Экономических Моделей Стимулирования Инновационных Процессов]," Working Papers 061713, Russian Presidential Academy of National Economy and Public Administration.
    18. By Kenneth L. Judd & Karl Schmedders & Şevin Yeltekin, 2012. "Optimal Rules For Patent Races," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 23-52, February.
    19. Fouad Ouardighi & Matan Shnaiderman & Federico Pasin, 2014. "Research and Development with Stock-Dependent Spillovers and Price Competition in a Duopoly," Journal of Optimization Theory and Applications, Springer, vol. 161(2), pages 626-647, May.
    20. Song, Yangbo & Zhao, Mofei, 2021. "Dynamic R&D competition under uncertainty and strategic disclosure," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 169-210.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:matcom:v:57:y:2001:i:1:p:19-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/mathematics-and-computers-in-simulation/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.