The Refoundation of the Symmetric Equilibrium in Schumpeterian Growth Models
License
Access Rights
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
0022-0531
Issue Date
Type of Publication
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
Journal of Economic Theory, 2007, 136, 1, 788-797
Cite
COZZI, Guido, GIORDANI, Paolo, ZAMPARELLI, Luca, The Refoundation of the Symmetric Equilibrium in Schumpeterian Growth Models, Journal of Economic Theory, 2007, 136, 1, 788-797 - https://hdl.handle.net/1814/16422
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. (C) 2006 Elsevier Inc. All rights reserved.