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Katz (1986) - An Analysis of Cooperative Research and Development (view source)
Revision as of 21:11, 6 December 2010
, 21:11, 6 December 2010no edit summary
That is <math>c\;</math> is positive, decreasing and convex, starting from a high value of <math>\overline{c}\;</math> at <math>z = 0\;</math>, and declining asymptotically to <math>\underline{c}\;</math> as <math>z \to \infty\;</math>.
Also, we assume that: :<math>V^i(\overline{c}) \ge 0,\quad ;</math> where <math>\mboxoverline{wherec}\; \overline_c = (\overline{c},\ldots,\overline{c})\;</math>
That is equilibrium profits are positive when no one does any R&D.
Comparing this with the FOC from the development stage, when every firm is a member:
:<math>V_i^i(c^n) (1 + (n-1)\overline{\phi} \rho(c^n))c'(z^n) - s^n = 0\;</math>
