Maria Luisa Petit

• Sapienza University of Rome

We study the endogenous formation of R&D agreements in a R&D/Cournot duopoly model with spillovers where also the timing of R&D investments is endogenous. This allows us to consider the incentives for firms to sign R&D agreements over time. It is shown that, when both R&D spillovers and investment costs are sufficiently low, firms may find difficul...

This paper analyzes how firms’ R&D investment decisions are affected by asymmetries in knowledge transmission, considering different sources of asymmetry such as unequal know-how management capabilities and spillovers localization within an international oligopoly. We show that a better ability to manage knowledge flows incentivizes the firm to inv...

Since innovation is clearly a dynamic phenomenon, the process of technological innovation should be analysed by making use of a dynamic approach. In this paper we present two different models of innovation in the framework of an oligopolistic market and show that differential (or difference) games can provide an appropriate analytical tool to analy...

We present a model of endogenous formation of R&D agreements among firms in which also the timing of R&D investment is made endogenous. The purpose is to bridge two usually separate streams of literature, the noncooperative formation of R&D alliances and the endogenous timing literature. Our approach allows to consider the formation of R&D agreemen...

The purpose of the chapter is to analyze how firms’ R&D investment decisions are affected by asymmetries in knowledge transmission, taking into account different sources of asymmetry, such as unequal know-how management capabilities and spillovers localization within an international oligopoly. We follow a game theoretic approach and consider a two...

Empirical evidence suggests that technological spillovers also depend on the mode chosen by firms to serve the foreign market, since a closer location increases the degree of knowledge transmission. Therefore multinationals may want to locate subsidiaries near sources of technological innovation and domestic firms may take advantage of this closer...

It has been empirically shown that firms invest in foreign countries with the aim to absorb technological knowledge. However, the recent literature on technological innovation and foreign expansion has not fully taken into account these features of foreign direct investment. Introducing this new element into the analysis implies assuming that multi...

This paper examines the impact of the firms' mode of foreign expansion on the incentive to innovate as well as the effects of R&D activities and technological spillovers on the firms' international strategy. We consider a two country imperfect competition model where the firms face three different type of decisions: how to expand abroad, how much t...

The economic literature provides empirical evidence of the existence of technological cartels, such as research joint ventures or deliberate sharing of technological knowledge. Our aim is to answer to the questions: (i) is the creation of technological cartels beneficial from a social welfare point of view? and (ii) do the firms have private incent...

The paper examines how investment in research influences the form of foreign expansion chosen by the firm, and vice versa. We consider a two-country model where a monopolist producing in one country can choose between export and foreign direct investment. We assume process innovation, where the cost-reducing technological innovations are an outcome...

This paper examines the impact of the firms' mode of foreign expansion on the incentive to innovate as well as the effects of R&D activities and technological spillovers on the firms' international strategy. We consider a two country imperfect competition model where the firms face three different type of decisions: how to expand abroad, how much t...

The effects of “technology sharing cartels” on the behavior of firms and industrial structure are analyzed. Unit production costs are assumed to decrease with experience, which at any given time is proportional to the total production accumulated until that time. The “learning by doing” process is examined in a context of a duopolistic market, mode...

The existence of an experience curve for the firm has theoretical foundation in Arrow’s pioneering work (Arrow, 1962). The study of the learning-curve effect was initiated, however, almost thirty years earlier by Wright (1936). It was further developed by Alchian (1959), Hirschleifer (1962), Hirschmann (1964), and by an important work by the Boston...

This book, originally published in 1990, deals with the stabilisation and control of an economic system in a dynamic setting. Unlike studies which consider only the case of centralised policy-making, Professor Petit examines both the situation in which policy decisions are taken by a single policy-maker and the case of group policy-making. The wide...

Economists habitually use the idea of a trade-off between two goods when making a choice between them. Similarly, they trade success in reaching one policy goal against the failure to reach another when choosing between alternative policy options. But, unlike the choice between goods, economic policy performance is not generally monotonic in the ta...

The costs of uncoordinated fiscal and monetary policies involve more than just efficiency losses. Of course there will be the usual efficiency losses associated with noncooperative decision making and they have appeared here. But these are not the main costs. A lack of cooperation between the government and the central bank also imposes a policy co...

In this paper the interaction between the Treasury and the central bank is examined in the case of both cooperative and non-cooperative behaviour. Differential games are used in the framework of a continuous-time econometric model of the Italian economy. The Nash and the Stackelberg non-cooperative equilibrium solutions are computed, and the case f...

By using optimal control methods, it is possible to identify the best inflation-output combinations which are compatible with a given empirical model. In general, these tradeoffs are calculated on the assumption that optimal policy decisions are centralised; i.e. that the political institutions concerned with planning act in complete agreement. How...

The use of continuous time dynamic models in economics has important advantages not only from the point of view of pure theory (as pioneered by Richard Goodwin) but also from the point of view of policy applications. One decisive advantage from the point of view of economic policy is the possibility of obtaining information from the model on the op...

In many countries two decision-making institutions, the government and the central bank, manage fiscal and monetary policy separately. Such decentralization can lead to a change in the optimal inflation-output trade-off. In fact lack of cooperation can result in a change in the position of the trade-off curve, or a reversal in the slope of this tra...

Econometric models are usually specified in discrete time, but the authors believe that econometric models specified as systems of stochastic differential equations are better suited to bridge the gap between economic theory and econometric modelling (and hence policy design). Recently developed econometric methods allow to obtain rigorous estimate...

The relationship between Tinbergen’s conditions and dynamic controllability conditions has been considered in a large number of papers which have followed Preston’s 1974 pioneering article. In particular a recent paper by Wohltmann [25] thoroughly analyses this relationship for the discrete time case. The continuous time case, however, in our opini...

The use of continuous time models in policy design has several advantages (see Gandolfo, 1981), amongst which there is the possibility of obtaining information on the optimal paths of instruments and targets at each point in time (and not only at discrete intervals). Econometric models are usually specified in discrete time, but recently developed...

After an introduction to the advantages of continuous time macroeconometric models, the authors briefly illustrate a macroeconometric model of the Italian economy specified as a system of 23 stochastic differential equations and show the application of optimal control techniques (based on Pontryagin's maximum principle) to this model. They illustra...

The use of continuous time models in policy design has several advantages (see Gandolfo, 1981), amongst which there is the possibility of obtaining information on the optimal paths of instruments and targets at each point in time (and not only at discrete intervals). Econometric models are usually specified in discrete time, but recently developed...

The authors investigate the functional form of the aggregate import demand equation in Italy by using the Box and Cox transformation and a non-linear full information maximum likelihood procedure instead of the two-step procedure usually followed.