Sah, Raaj Kumar; Stiglitz, Joseph E. - In: RAND Journal of Economics 18 (1987) 1, pp. 98-108
This article provides a set of conditions under which the R&D undertaken in a market economy is invariant to the number (or size distribution) of firms and the market's allocation is efficient (i.e., given the aggregate expenditure, the market chooses socially optimal projects). As in several...