Journal of technology management & innovation
On-line version ISSN 0718-2724
MUKHERJEE, Arijit and WANG, Leonard F.S. The Winner Curse and Social Inefficiency: Double Whammy of R&D Tournament. Journal of Technology Management & Innovation [online]. 2011, vol.6, n.4, pp.73-79. ISSN 0718-2724. http://dx.doi.org/10.4067/S0718-27242011000400006.
In a R&D tournament setting with free entry and knowledge spillover, we show that the society would suffer from ex- cessive entry and the patent holder would endure lower profits than non-patent holders because it bears the cost of commercializing and further technology development, while the other firms are beneficiaries of the spillover effects. This result is instructive to R&D and competition policy.
Keywords : R & D tournament; excessive entry; insufficient entry.