Innovation Races with the Possibility of Failure

The standard innovation race specification assumes a memoryless exponential distribution for the time to success of an R&D project. This specification implies that a project succeeds, eventually, with probability one. We introduce a positive probability that an R&D project fails. With this modified specification, we compare the non-cooperative and cooperative R&D in terms of innovation effort, consumer surplus, and net social welfare.

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Year of publication:	2011-08
Authors:	M. Chowdhury, Subhasish ; Martin, Stephen
Institutions:	Department of Economics, School of Business
Subject:	innovation \| research & development \| R&D joint ventures \| parallel research projects

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1106 37 pages
Classification:	L13 - Oligopoly and Other Imperfect Markets ; O31 - Innovation and Invention: Processes and Incentives ; O38 - Government Policy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010552485