Handbook of Game Theory and Industrial Organization, Volume II
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Handbook of Game Theory and Industrial Organization, Volume II

Applications

Edited by Luis C. Corchón and Marco A. Marini

This second volume of the Handbook includes original contribution by experts in the field. It provides up-to-date surveys of the most relevant applications of game theory to industrial organization. The book covers both classical as well as new IO topics such as mergers in markets with homogeneous and differentiated goods, leniency and coordinated effects in cartels and mergers, static and dynamic contests, consumer search and product safety, strategic delegation, platforms and network effects, auctions, environmental and resource economics, intellectual property, healthcare, corruption, experimental industrial organization and empirical models of R & D.
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Chapter 18: Empirical models of firms’ R & D

Applications

Andrés Barge-Gil, Elena Huergo, Alberto López and Lourdes Moreno

Extract

During the last few decades, economists have paid increasing attention to the role played by research and development (R & D) in modern economies. The origins of this research agenda are often credited to Solow’s (1957) work on the importance of the total factor productivity growth as a measure of technological change, and to Nelson’s (1959) and Arrow’s (1962) works on the economics of knowledge creation (Encaoua et al., 2013). From a theoretical point of view, the tools of new game theory were applied to analyze the behavior and interactions of firms undertaking R & D. From an empirical point of view, some authors began the task of measuring and understanding the determinants and outcomes of R & D. Nowadays, the empirical literature on R & D is abundant and still growing because of the increasing availability of micro-data. Taking this fact into account, the main purpose of this chapter is to provide a general view of three of the main topics covered by this literature: the determinants of firms’ R & D investments, the link between R & D, innovation and productivity, and the studies trying to open up and examine the contents of the black box of R & D. To this aim, we build on already existing reviews, and complete them with some recent works. In addition, we pay special attention to some new lines of research not covered in previous reviews. For reasons of space, our analysis does not address other topics that appear to be worthwhile, like the relationship between R & D and employment, the outsourcing and/or offshoring of R & D, or R & D spillovers.

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