R&D investment game strategies under uncertain patent acquisition and non-infringing imitation
by Wonseok Kang
Asian J. of Management Science and Applications (AJMSA), Vol. 2, No. 4, 2016

Abstract: We construct R&D competition between two firms as a game, and reconstruct it as a probabilistic model. By differentiating variables of non-infringing imitation probability and patent acquisition probability in the sensitivity analysis, we suggest advantageous competitive strategy for each of the two firms engaged in asymmetric R&D competition. Analytical outcomes under the conditions of zero-sum and non-zero-sum games are as follows: regardless of patent acquisition probability, the superior gets higher R&D incentives in zero-sum game. Thus, it is strategically favourable for the superior firm to make R&D investment under zero-sum game; the inferior conditionally gets higher strategic R&D incentives under non-zero-sum game.

Online publication date: Fri, 17-Mar-2017

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