Stability in the patent race contest of Lee and Wilde

To determine how expenditure and profits vary with the number of firms in t he patent race contest of Lee and Wilde, it is traditional to impose an ad- hoc stability condition on the best response function. This paper relates t he stability condition to the standard myopic adjustment mechanism and show s that a concave hazard rate function with nonincreasing hazard rate elasti city is sufficient for the analysis. We provide examples and reveal additio nal qualitative properties of the Lee and Wilde model.