Abstract
An analytical framework for the spatial and sequential decision processes of knowledge-oriented firms is presented, in which each firm is oligopolistically competing with other firms on the basis of inventive activities. The location behavior of new entrants is described as a two-stage decision process: (a) choosing the region in which to produce, and (b) determining the optimal level of output and the combination of inputs to produce. A hierarchical game-like framework is an essential part of the model. Both timing and intensity are major decision variables for the public provision of knowledge infrastructure. Numerical examples illustrate some implications for knowledge-based regional development policies.
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