G. Cozzi
The refoundation of the symmetric equilibrium in Schumpeterian growth models
Cozzi, G.; Giordani, P.E.; Zamparelli, L.
Authors
P.E. Giordani
L. Zamparelli
Abstract
We provide a refoundation of the symmetric growth equilibrium characterizing the research sector of vertical R&D-driven growth models. We argue that the usual assumptions made in this class of models leave the agents indifferent as to where targeting research: hence, the problem of the allocation of R&D investment across sectors is indeterminate. By introducing an “ε-contamination of confidence” in the expected distribution of R&D investment, we prove that the symmetric structure of R&D investment is the unique rational expectations equilibrium compatible with ambiguity-averse agents adopting a maxmin strategy.
Citation
Cozzi, G., Giordani, P., & Zamparelli, L. (2007). The refoundation of the symmetric equilibrium in Schumpeterian growth models. Journal of Economic Theory, 136(1), 788-797. https://doi.org/10.1016/j.jet.2006.10.006
Journal Article Type | Article |
---|---|
Publication Date | Sep 1, 2007 |
Deposit Date | Feb 15, 2010 |
Journal | Journal of Economic Theory |
Print ISSN | 0022-0531 |
Electronic ISSN | 1095-7235 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 136 |
Issue | 1 |
Pages | 788-797 |
DOI | https://doi.org/10.1016/j.jet.2006.10.006 |
Keywords | R&D-driven growth models, Indeterminacy, Ambiguity, ε-contamination. |
Public URL | https://durham-repository.worktribe.com/output/1522121 |
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