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Publicação
Bias in Market R&D Portfolios
Autores
Orientador(es)
Resumo(s)
Based on a simple "contest" model of product innovation, we provide a necessary and sufficient condition for the market to be biased against risky R&D projects. We find that, in accordance with conventional wisdom and contrary to much of the previous theoretical literature, market competition implies an equilibrium level of risk which is too low from society's standpoint. The intuition for the result in terms of the "business stealing" effect is provided.
Descrição
Palavras-chave
R&D competition Oligopoly
Contexto Educativo
Citação
Cabral, Luís, Bias in Market R&D Portfolios (July, 1992). FEUNL Working Paper Series No. 188