Consider a three-firm version of the patent-race model (9.2.1) studied in class.

Question

Consider a three-firm version of the patent-race model (9.2.1) studied in class. Suppose that each one of the three firms is capable of developing a product. Let V denote the dollar value of the patent associated with the new product. Each firm can construct a research lab which requires a fixed investment of I dollars. Assume that if a firm constructs a lab, it has a probability of of discovering the product. If only one firm discovers the product, it will earn a profit of V. If only two firms discover, then each will earn , and if all three discover, then each will earn . (20 points) As in class, draw the

Explanation / Answer

http://www.cenet.org.cn/editor/userfiles/Other/2012-06/2012060212490546145361.pdf

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---