Selection Biases in Complementary R&amp;D Projects

Choi, Jay Pil; Gerlach, Heiko

doi:10.1111/jems.12071

Cited by 10 publications

(9 citation statements)

References 23 publications

(34 reference statements)

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“…Let x t be the unsearched area of the island at the beginning of period t. Second, each player i simultaneously plans an area I i,t ∈ [0, x t ] to search at a cost of cI i,t , where c > 0. 9 The regions searched by the players are partially coordinated according to a process discussed below. Finally, search plans are implemented.…”

Section: The Modelmentioning

confidence: 99%

Duplicative search

Matros

Smirnov

2016

Games and Economic Behavior

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In this paper we examine the dynamic search of two rivals looking for a prize of known value that is hidden in an unknown location, modeled as search for treasure on an island. In every period, the players choose how much to search of the previously unsearched portion of the island in a winner-takes-all contest. If the players cannot coordinate so as to avoid searching the same locations, the unique equilibrium involves complete dissipation of rents. On the other hand, if the players have some (even limited) ability to coordinate so as to avoid duplicative search and the search area is sufficiently small, there is a unique equilibrium in which the full area is searched and each player earns a positive expected return.

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Section: The Modelmentioning

confidence: 99%

Duplicative search

Matros

Smirnov

2016

Games and Economic Behavior

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“…Other papers endogenize project choice when technologies are substitutes in the product market, either by considering sequential project choices (Cardon and Sasaki 1998) or by allocating resources across projects (Lin and Zhou 2013). Choi and Gerlach (2014), on the other hand, consider the sequential development of complementary technologies. Our paper adds to the literature by focusing on the simultaneous R&D allocation across projects under alternative trading environments.…”

Section: Related Literaturementioning

confidence: 99%

IP-for-IP or Cash-for-IP? R&D Competition and the Market for Technology

Herbst

Jahn

2016

Rev Ind Organ

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We analyze how firms might benefit from trading restrictions in the market for technology. We show that restricting trade to reciprocal exchange (“IP-for-IP” barter instead of cash transactions), as in cross-licensing agreements, alters the allocation of R&D resources and reduces overinvestment in R&D. The tighter are the trading restrictions, the higher are the costs that are due to forgone gains from trade. Our analysis of the trade-offs involved shows that firms benefit from IP-for-IP restrictions, compared to both free trade and no trade environments, in industries where: (1) firms differ in their capabilities to commercialize IP; and (2) patent complementarities exist

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“…More recent work on the direction of innovation is also related to our paper in that the main focus is on the direction of research rather than the quantity of R&D. Bryan and Lemus (2017) show that "racing" and "underappropriation" distortions lead to ine¢ cient allocation of resources even if the aggregate quantity of research is optimal. Choi and Gerlach (2014) analyze selection biases in the project choice of complementary technologies which allow innovating …rms to hold up rivals who succeed in developing other system components with patents. They show that patents make innovation rewards independent of project di¢ culties and …rms excessively cluster their R&D e¤orts on a relatively easier technology in order to preemptively claim stakes on component property rights.…”

Section: Introductionmentioning

confidence: 99%

Two-Sided Platforms and Biases in Technology Adoption

Choi

Jeon

2020

SSRN Journal

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We investigate how platform market power and business models a¤ect platforms' design choices in two-sided markets, where platforms may …nd it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider design choices a¤ecting both sides in opposite ways and compare private incentives with social incentives. Platforms'design biases depend crucially on whether they can charge any price on the consumer side. We apply the framework to technology adoption, privacy, and ad load choices. Our results provide a rationale for a tougher competition policy to curb market power of ad-funded platforms.

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Selection Biases in Complementary R&D Projects

Cited by 10 publications

References 23 publications

Duplicative search

Duplicative search

IP-for-IP or Cash-for-IP? R&D Competition and the Market for Technology

Two-Sided Platforms and Biases in Technology Adoption

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