• Corpus ID: 237091710

Strategic Exploration for Innovation

  title={Strategic Exploration for Innovation},
  author={Shang-ao Li},
We analyze a game of technology development where players allocate resources between exploration, which continuously expands the public domain of available technologies, and exploitation, which yields a flow payoff by adopting the explored technologies. The qualities of the technologies are correlated and initially unknown, and this uncertainty is fully resolved once the technologies are explored. We consider Markov perfect equilibria with the quality difference between the best available… 

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