The Effects of Rivalry on Scientific Progress under Public vs Private Learning

56 Pages Posted: 6 Feb 2019 Last revised: 22 Dec 2022

See all articles by Heidrun C. Hoppe-Wewetzer

Heidrun C. Hoppe-Wewetzer

University of Hannover - Department of Economics; and CEPR

Georgios Katsenos

University of Hannover - Department of Economics

Emre Ozdenoren

London Business School; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: January 23, 2019

Abstract

We offer a model of scientific progress in which uncertainty resolves
over time. We show that rivalry leads to less experimentation, extending
results for preemption games to experimentation with uncertain outcomes. We
compare experimentation duration and welfare when experimental outcomes are publicly versus privately observable. We show that public learning can generate more
experimentation and higher welfare when uncertainty about the feasibility of
a breakthrough is large; breakthroughs are rare even when they are feasible;
and experiments produce results infrequently. Our results shed light on
recent criticism of the science system.

Keywords: Stopping game, experimentation, learning, preemption, multiarmed bandit problem

JEL Classification: D83, O31

Suggested Citation

Hoppe-Wewetzer, Heidrun C. and Katsenos, Georgios and Ozdenoren, Emre, The Effects of Rivalry on Scientific Progress under Public vs Private Learning (January 23, 2019). Available at SSRN: https://ssrn.com/abstract=3321231 or http://dx.doi.org/10.2139/ssrn.3321231

Heidrun C. Hoppe-Wewetzer

University of Hannover - Department of Economics; and CEPR ( email )

Koenigsworther Platz 1
30167 Hannover
Germany

HOME PAGE: http://www.mik.uni-hannover.de

Georgios Katsenos

University of Hannover - Department of Economics ( email )

Koenigsworther Platz 1
Hannover, 30167
Germany

Emre Ozdenoren (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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