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 maximin strategy.

The Refoundation of the Symmetric Equilibrium in Schumpeterian Growth Models / Cozzi, Guido; Giordani, Paolo; Zamparelli, Luca. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - 136:1(2007), pp. 788-797. [10.1016/j.jet.2006.10.006]

The Refoundation of the Symmetric Equilibrium in Schumpeterian Growth Models

COZZI, GUIDO;GIORDANI, PAOLO;ZAMPARELLI, LUCA
2007

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 maximin strategy.
R&D-Driven Growth Models; Indeterminacy; Ambiguity; ε-contamination
The Refoundation of the Symmetric Equilibrium in Schumpeterian Growth Models / Cozzi, Guido; Giordani, Paolo; Zamparelli, Luca. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - 136:1(2007), pp. 788-797. [10.1016/j.jet.2006.10.006]
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/7139
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