Title: R&D investment game strategies under uncertain patent acquisition and non-infringing imitation

Authors: Wonseok Kang

Addresses: Department of Management, Korea Military Academy, Seoul City, 139-804, Republic of Korea

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.

Keywords: R&D investment strategy; R&D incentives; patent protection; R&D competition; patent acquisition; investment games; patent acquisition; non-infringing imitation; research and development; game theory; patents; probabilistic models; zero-sum game; uncertainty.

DOI: 10.1504/AJMSA.2016.082959

Asian Journal of Management Science and Applications, 2016 Vol.2 No.4, pp.338 - 355

Received: 24 Sep 2015
Accepted: 10 Feb 2016

Published online: 13 Mar 2017 *

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