Abstract/Index

We provide a refoundation of the symmetric growth equilibrium characterizing the research sector of vertical R&D-driven growth models. We argue that the usual assumptions made in this class of models leave the agents indfferent as to where targeting research: hence, the problem of the allocation of R&D investment across sectors is indeterminate. By introducing an "[epsilon]-contamination of con…dence" in the expected distribution of R&D investment, we prove that the symmetric structure of R&D investment is the unique rational expectations equilibrium compatible with ambiguity-averse agents adopting a maximin strategy.