I nnovative activity and sunk cost
نویسندگان
چکیده
We analyze innovative activity in a general framework with time-dependent rewards and sunk costs. When firms are identical, innovation is delayed by an increase in the number of firms or a decrease in the size of the reward. When one firm has higher profit potential, it is more likely to innovate first. Our framework generalizes an all-pay auction; however, we show that under certain conditions there is qualitatively different equilibrium behavior. 2003 Elsevier B.V. All rights reserved. JEL classification: D44; O31; O32
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تاریخ انتشار 2002