Innovation Races with the Possibility of Failure

Chowdhury, Subhasish M.; Martin, Stephen

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Cite this item: Chowdhury, S. M., & Martin, S. (2011). Innovation Races with the Possibility of Failure (Economics Discussion Papers Series No. 1106). University of Otago. Retrieved from http://hdl.handle.net/10523/1876
Permanent link to OUR Archive version: http://hdl.handle.net/10523/1876
Abstract:
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.
Date: 2011-08-01
Publisher: University of Otago
Series: Economics Discussion Papers Series
Series number: 1106
ISSN: 1178-2293
Keywords: innovation; research & development; R&D joint ventures; parallel research projects
Research Type: Discussion Paper
Languages: English

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