Subsidizing Technological Innovations in the Presence of R&D Spillovers
AbstractWe analyze a situation where a principal wants to induce firms to produce an output, e.g. electricity from renewable energy sources. Firms can undertake non-contractible investments to reduce production costs of the output. Parts of these investments spills over and also reduce production costs of the other firm. Comparing the general price subsidy and an innovation tournament, we find that the principal's expected cost of implementing a given expected output are always higher under the tournament, even though this scheme may lead to more innovation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL) in its series Darmstadt Discussion Papers in Economics with number 36798.
Date of creation: Nov 2005
Date of revision:
Publication status: Published in Darmstadt Discussion Papers in Economics . 154 (2005-11)
Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/36798/
Contact details of provider:
Postal: Hochschulstr. 1, 64289 Darmstadt
Phone: ++49 (0)6151 16-2701
Fax: ++49 (0)6151 16-6508
Web page: http://www.wi.tu-darmstadt.de/fachgebiete/fachgebiete_4/volkswirtschaftlichefachgebiete.de.jsp
More information through EDIRC
R&D spillovers; tournaments; subsidies; moral hazard;
Other versions of this item:
- Carsten Helm & Anja Schöttner, 2008. "Subsidizing Technological Innovations in the Presence of R&D Spillovers," German Economic Review, Verein für Socialpolitik, vol. 9, pages 339-353, 08.
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mansfield, Edwin, 1985. "How Rapidly Does New Industrial Technology Leak Out?," Journal of Industrial Economics, Wiley Blackwell, vol. 34(2), pages 217-23, December.
- Fullerton, Richard, et al, 1999. "An Experimental Investigation of Research Tournaments," Economic Inquiry, Western Economic Association International, vol. 37(4), pages 624-36, October.
- Fischer, Carolyn & Parry, Ian W. H. & Pizer, William A., 2003.
"Instrument choice for environmental protection when technological innovation is endogenous,"
Journal of Environmental Economics and Management,
Elsevier, vol. 45(3), pages 523-545, May.
- Parry, Ian & Pizer, William & Fischer, Carolyn, 1998. "Instrument Choice for Environmental Protection When Technological Innovation is Endogenous," Discussion Papers dp-99-04, Resources For the Future.
- Tsur, Yacov & Zemel, Amos, 2002. "The Regulation of Environmental Innovations," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 242-260, September.
- Jung, Chulho & Krutilla, Kerry & Boyd, Roy, 1996. "Incentives for Advanced Pollution Abatement Technology at the Industry Level: An Evaluation of Policy Alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 95-111, January.
- Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
- Rabah Amir, 1998.
"Modelling Imperfectly Appropriable R&D via Spillovers,"
CIE Discussion Papers
1998-07, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
- Jeroen Hinloopen, 1997. "Subsidizing cooperative and noncooperative R&D in duopoly with spillovers," Journal of Economics, Springer, vol. 66(2), pages 151-175, June.
- Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
- AMIR , Rabah, 1995.
"Continuous Stochastic Games of Capital Accumulation with Convex Transition,"
CORE Discussion Papers
1995009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Amir, Rabah, 1996. "Continuous Stochastic Games of Capital Accumulation with Convex Transitions," Games and Economic Behavior, Elsevier, vol. 15(2), pages 111-131, August.
- Jeroen Hinloopen, 2003. "R&D Efficiency Gains Due to Cooperation," Journal of Economics, Springer, vol. 80(2), pages 107-125, October.
- Thomas P. Gehrig, 2004. "Organizational Form and Information Acquisition," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(1), pages 39-, March.
- Manne, Alan & Richels, Richard, 2004. "The impact of learning-by-doing on the timing and costs of CO2 abatement," Energy Economics, Elsevier, vol. 26(4), pages 603-619, July.
- Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
- Suzumura, Kotaro, 1992. "Cooperative and Noncooperative R&D in an Oligopoly with Spillovers," American Economic Review, American Economic Association, vol. 82(5), pages 1307-20, December.
- Biglaiser, Gary & Horowitz, John K, 1995. "Pollution Regulation and Incentives for Pollution-Control Research," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(4), pages 663-84, Winter.
- Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-90, September.
- Requate, Till & Unold, Wolfram, 2003. "Environmental policy incentives to adopt advanced abatement technology:: Will the true ranking please stand up?," European Economic Review, Elsevier, vol. 47(1), pages 125-146, February.
- Julien Jacob, 2011. "Innovation and diffusion in risky industries under liability law: the case of “double-impact” innovations," Working Papers of BETA 2011-24, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Reichenbach, Johanna & Requate, Till, 2012.
"Subsidies for renewable energies in the presence of learning effects and market power,"
Resource and Energy Economics,
Elsevier, vol. 34(2), pages 236-254.
- Johanna Reichenbach & Till Requate, 2011. "Subsidies for Renewable Energies in the Presence of Learning Effects and Market Power," Kiel Working Papers 1689, Kiel Institute for the World Economy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dekanatssekretariat).
If references are entirely missing, you can add them using this form.