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Spence (1984) - Cost Reduction Competition And Industry Performance (view source)
Revision as of 18:29, 7 December 2010
, 18:29, 7 December 2010no edit summary
Which is the '''total benefits from R&D''' as a function of a single parameter <math>v\;</math, such that the '''marginal benefits from R&D''' are:
:<math>R'(v) = 1-s\;</math>
The function <math>R\;</math> (which I labelled the total benefits from R&D), captures the market incentives with respect to R&D. Assuming <math>E_j^i < 0 , \; i \ne j\;</math>, then:
*<math>R_{\theta} < 0\;</math>: Benefits are decreasing in spillovers
*<math>R_{z \theta) } < 0\;</math>: ...
