R&D portfolio strategy on new spectrum in 5G invested by lagging firms

Abstract

This paper explores the issue of patent race in which 5G enterprises invest the patent package in the field of new spectrum to research and develop some core technologies. Based on the comprehensive interaction of expected profit, investment risk, and withdrawal cost, this paper aims to achieve the two objectives of maximizing the profit and minimizing the investment risk for a lagging firm. By numerical experiment analysis, the optimal portfolio strategy of a lagging firm is obtained, followed by the phenomenon in patent race of investment disinvestment. The result shows that the lagging firm can focus on certain self-interested technologies to realize the leap of key technologies in research and development (R&D) under the high degree selection condition independently. In addition, different initial investment shares affect the portfolio strategy.