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

By R. Lukach, P. M. Kort, Joseph E. J. Plasmans. Social Science Research Network, 2007

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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.

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