The refoundation of the symmetric equilibrium in Schumpeterian growth models
Journal
Journal of Economic Theory
ISSN
0022-0531
ISSN-Digital
1095-7235
Type
journal article
Date Issued
2007-09-01
Author(s)
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 "?-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.
Language
English
Keywords
R&D-driven growth models
indeterminacy
ambiguity
?-contamination
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
136
Number
1
Start page
788
End page
797
Pages
10
Subject(s)
Eprints ID
222066