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The refoundation of the symmetric equilibrium in Schumpeterian growth models.

Cozzi, G. and Giordani, P. E. and Zamparelli, L. (2007) 'The refoundation of the symmetric equilibrium in Schumpeterian growth models.', Journal of economic theory., 136 (1). pp. 788-797.

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.

Item Type:Article
Keywords:R&D-driven growth models, Indeterminacy, Ambiguity, ε-contamination.
Full text:Full text not available from this repository.
Publisher Web site:http://dx.doi.org/10.1016/j.jet.2006.10.006
Record Created:15 Feb 2010 16:35
Last Modified:20 Aug 2010 12:15

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