Process Spillovers and Growth: A Comment on the Existence of a Stable Closed‐Loop Nash Equilibrium

In a recent paper Luckraz (2008) develops a differential game model to show that a lack of intellectual property protection can improve economic growth in economies, where large technology gaps prevail. However, this conclusion depends crucially on the fact that the closed‐loop equilibrium of the model degenerates to the open‐loop equilibrium. This note generalizes the results of Luckraz by formulating a setup in which the closed‐loop equilibrium does not degenerate to the open‐loop equilibrium of the differential game.