We take a differential game approach to study the optimal choices of managerial firms concerning efforts in product an process innovation. We find the Nash equilibria under the open-loop and closed-loop information structure, and we compare the steady state allocations with the corresponding equilibria of markets populated by standard profit-maximising firms. We find that the managerial incentive leads firm to underinvest in product differentiation and to overinvest in process innovation, as compared to standard profit-maximising firms.

Cellini R., Lambertini L. (2008). Product and Process Innovation in Differential Games with Managerial Firms. BINGLEY : Emerald Publishing [10.1016/S0573-8555(08)00209-5].

Product and Process Innovation in Differential Games with Managerial Firms

LAMBERTINI, LUCA
2008

Abstract

We take a differential game approach to study the optimal choices of managerial firms concerning efforts in product an process innovation. We find the Nash equilibria under the open-loop and closed-loop information structure, and we compare the steady state allocations with the corresponding equilibria of markets populated by standard profit-maximising firms. We find that the managerial incentive leads firm to underinvest in product differentiation and to overinvest in process innovation, as compared to standard profit-maximising firms.
2008
The Economics of Innovation: Incentives, Cooperation, and R&D Policy
159
176
Cellini R., Lambertini L. (2008). Product and Process Innovation in Differential Games with Managerial Firms. BINGLEY : Emerald Publishing [10.1016/S0573-8555(08)00209-5].
Cellini R.; Lambertini L.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/69380
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