Divergent Expectations, R & D Expenditures and Technical Progress
- Creators
- Quirk, James P.
- Terasawa, Katsuaki
Abstract
This paper deals with the problem of whether diversity of beliefs or consensus leads to a higher level of R and D spending in an industry, or a faster rate of technical progress, or a lower price for the industry's product. The answer depends upon characteristics of the demand function for industry output as well as the density functions reflecting probability beliefs of firm managers. Sufficient conditions are given for consensus (diversity) to ''pay'' in terms of R and D spending and/or the rate of technological progress, and R and D spending under market incentives is contrasted with an "optimal" level of R and D expenditures. The analysis is illustrated in more detail for the case of exponential density functions.
Additional Information
This research was supported in part under a grant from the Department of Energy. We also wish to thank Forrest Nelson, Dave Grether, and Gib Bogle for their helpful comments, and Jeanne Wadsworth, and Leslie Fort for their typing of this paper. The intellectual stimulus for the paper comes from many conversations with Burt Klein concerning issues discussed in his recent work; but he should not be held responsible for the specifics of our model or our interpretation of the problem posed here. Published as Quirk, James, and Katsuaki Terasawa. "Divergent Expectations and R&D Expenditures," in Coal Models under Use in Government Planning, eds. Quirk, Janes P., Terasawa, K., and Whipple, David. Praeger Press, 1982.Attached Files
Published - sswp361.pdf
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Additional details
- Alternative title
- Divergent Expectations and R & D Expenditures
- Eprint ID
- 82188
- Resolver ID
- CaltechAUTHORS:20171006-151341415
- Department of Energy (DOE)
- Created
-
2017-10-09Created from EPrint's datestamp field
- Updated
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2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 361