A Stochastic Competitive R&D Race Where Winner Takes All

• 成果类型: Article
• 署名作者: Canbolat, Pelin G.; Golany, Boaz; Mund, Inbal; Rothblum, Uriel G.
• 署名单位: Technion Israel Institute of Technology; Technion Israel Institute of Technology
• 刊物名称: OPERATIONS RESEARCH
• ISSN/ISSBN: 0030-364X
• DOI: 10.1287/opre.1120.1055
• 发表日期: 2012
• 页码: 700-715
• 关键词: contest success functions; development-projects; expenditure patterns; resource-allocation; PATENT PROTECTION; market-structure; rent-seeking; risky r; games; equilibrium

摘要

The paper considers a race among multiple firms that compete over the development of a product. The first firm to complete the development gains a reward, whereas the other firms gain nothing. Each firm decides how much to invest in developing the product, and the time it completes the development is a random variable that depends on the investment level. The paper provides a method for explicitly computing a unique Nash equilibrium, parametrically in the interest rate; for a given interest rate, the Nash equilibrium is determined in time that is linear in the number of firms. The structure of the solution yields insights about the behavior of the participants. Furthermore, an explicit expression for a unique globally optimal solution is obtained and compared to the unique Nash equilibrium.