Process spillovers and growth: A comment on the existence of a stable closed-loop Nash equilibrium
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In a recent paper Luckraz (J. Optim. Theory Appl. 139:315–335, 2008) develops a differential game model to show that a lack of intellectual property protection can improve economic growth in economies, where large technology gaps prevail. However, this conclusion depends crucially on the fact that the closed-loop equilibrium of the model degenerates to the open-loop equilibrium. This note generalizes the results of Luckraz by formulating a setup in which the closed-loop equilibrium does not degenerate to the open-loop equilibrium of the differential game.
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