Econometrica: May 1982, Volume 50, Issue 3

A Dynamic Game of R and D: Patent Protection and Competitive Behavior<671:ADGORA>2.0.CO;2-#
p. 671-688

Jennifer F. Reinganum

A theory of dynamic optimal resource allocation to R and D in an n-firm industry is developed using differential games. This technique represents a synthesis of the analytic methods previously applied to the problem: static game theory and optimal control. The use of particular functional forms allows the computation and detailed discussion of the Nash equilibrium in investment rules.

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