Experiments in Multi-Stage R&D Competition

Abstract

In this paper we present the results from a series of experiments dealing with R&D competition. The aim of the experiments was to provide some insights into how firms search for innovations that will allow them to gain significant profits, as in the case of patentable innovations, and how they adjust their search strategies in order to take account of the competition from other potential innovators. Other aspects examined by our experiments were how firms (subjects) distributed their spending over the periods their search lasted, what use they made of information on their own performance and on that of their competitors, and what elements were likely to influence their decision to enter the competition or to drop out.

Patrizia Sbriglia thanks the Fondazione Ivo Vanzi (Napoli) for financing a substantial part of the experiments, and the CNR for financial support during her visit to the University of York. We thank Norman Spivey of EXEC for providing the networked software for the experiments, and the EXEC staff- Cristina Pitassi and Gianna Lotito - for assistance during the experiments.