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Rivals' Search for Buried Treasure: Competition and Duplication in R&D

Author

Listed:
  • Kaylan Chatterjee

    (The Pennsylvania State University)

  • Robert Evans

    (St. John's College)

Abstract

We analyze an R&D race in which, in each period, two firms each choose which of two research projects to invest in. Each observes the other's past choices and so strategic search is possible. Equilibrium is efficient if the projects differ only in their probability of being the "right'' project. If they differ in other dimensions (e.g., cost), then there may be too much or too little duplication relative to the social optimum.

Suggested Citation

  • Kaylan Chatterjee & Robert Evans, 2004. "Rivals' Search for Buried Treasure: Competition and Duplication in R&D," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 160-183, Spring.
    • Handle: RePEc:rje:randje:v:35:y:2004:1:p:160-183
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    Citations

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    Cited by:

    1. Nicolas Klein, 2009. "Free-Riding And Delegation In Research Teams," 2009 Meeting Papers 253, Society for Economic Dynamics.
    2. Bavly, Gilad & Heller, Yuval & Schreiber, Amnon, 2022. "Social welfare in search games with asymmetric information," Journal of Economic Theory, Elsevier, vol. 202(C).
    3. Igor Letina, 2016. "The road not taken: competition and the R&D portfolio," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 433-460, May.
    4. Stefano Comino & Fabio M. Manenti, 2022. "Patent portfolios and firms’ technological choices," Journal of Economics, Springer, vol. 137(2), pages 97-120, October.
    5. Ufuk Akcigit & Qingmin Liu, 2011. "The Role of Information in Competitive Experimentation," Levine's Working Paper Archive 786969000000000321, David K. Levine.
    6. 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.
    7. Nicolas Klein & Sven Rady, 2011. "Negatively Correlated Bandits," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(2), pages 693-732.
    8. Kaustav Das & Nicolas Klein, 2020. "Do Stronger Patents Lead to Faster Innovation? The Effect of Duplicative Search," Discussion Papers in Economics 20/03, Division of Economics, School of Business, University of Leicester.
    9. Färnstrand Damsgaard, Erika, 2009. "Patent Scope and Technology Choice," Working Paper Series 792, Research Institute of Industrial Economics.
    10. Kaustav Das, 2014. "Strategic Experimentation with Competition and Private Arrival of Information," Discussion Papers 1404, University of Exeter, Department of Economics.
    11. Klein, Nicolas, 2013. "Strategic learning in teams," Games and Economic Behavior, Elsevier, vol. 82(C), pages 636-657.
    12. Thomas Greve & Hans Keiding, 2023. "A model of privately funded public research," Journal of Economics, Springer, vol. 140(1), pages 63-91, September.
    13. Matros, Alexander & Ponomareva, Natalia & Smirnov, Vladimir & Wait, Andrew, 2019. "Search without observability," Working Papers 2019-04, University of Sydney, School of Economics.
    14. Konrad, Kai A., 2014. "Search duplication in research and design spaces — Exploring the role of local competition," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 222-228.
    15. Matros, Alexander & Smirnov, Vladimir, 2011. "Treasure game," Working Papers 2011-10, University of Sydney, School of Economics, revised May 2014.
    16. Kaustav Das, 2013. "Strategic Experimentation with Heterogeneous Agents and Payoff Externalities," Discussion Papers 1315, University of Exeter, Department of Economics.
    17. Shalem, Roy & Trajtenberg, Manuel, 2009. "The Market for R&D Failures," Foerder Institute for Economic Research Working Papers 275729, Tel-Aviv University > Foerder Institute for Economic Research.
    18. 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.
    19. Matros, Alexander & Ponomareva, Natalia & Smirnov, Vladimir & Wait, Andrew, 2022. "Search without looking," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    20. Kaustav Das & Nicolas Klein, 2024. "Do Stronger Patents Lead To Faster Innovation? The Effect Of Clustered Search," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(2), pages 915-954, May.
    21. Denicolò, Vincenzo & Zanchettin, Piercarlo, 2022. "Patent protection for complex technologies," International Journal of Industrial Organization, Elsevier, vol. 81(C).
    22. Bryan, Kevin A. & Lemus, Jorge, 2017. "The direction of innovation," Journal of Economic Theory, Elsevier, vol. 172(C), pages 247-272.
    23. Matros, Alexander & Smirnov, Vladimir, 2016. "Duplicative search," Games and Economic Behavior, Elsevier, vol. 99(C), pages 1-22.

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