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Alogoskoufis amount of R&D assumption Brander and Spencer Centre for Economic CEPR DISCUSSION PAPERS collaborate conclusion consider constant hazard rate Cournot creative destruction current profits determined Discus Duke of York duopoly ease of imitation Economic Policy Research effects expected present value face two relatively firm innovating firm l's reaction firm's profits firm/industry flow rate forces four firms future profits gains from cooperation gap is large hazard rate chosen hence high cost firms incentive and competitive innovation is large innovation is small introduce investment joint venture learning-by-doing low cost firms Macroeconomic marginal costs Minford model of strategic Nash equilibrium nature of firm probability of discovery product market profit advantage R&D cooperation R&D costs R&D expenditure R&D race R&D spending R&D subsidies rate x relative magnitudes rival firm single one-stage race sion Papers Standing orders strategic innovation STRATEGIC R&D POLICY successfully innovate threats and profit understand the outcome