Public Policy towards R&D in a Mixed Duopoly with Spillovers
AbstractWe investigate the use of subsidies to R&D, both in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is positive and increasing in the degree of spillovers both in the private and the mixed duopoly, although it is lower for the former than for the latter. We also find support for the empirical claim that privatization is followed by a scaling down of the R&D activity. A comparative static analysis of welfare levels suggests that privatization is welfare detrimental, which lends some support to the views against the widespread adoption of privatization programs.
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Bibliographic InfoPaper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2006_17.
Date of creation: Jul 2006
Date of revision:
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mixed duopoly; process innovation; R&D subsidies; privatisation; spillovers.;
Find related papers by JEL classification:
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
- L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-30 (All new papers)
- NEP-COM-2006-09-30 (Industrial Competition)
- NEP-MIC-2006-09-30 (Microeconomics)
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- repec:ebl:ecbull:v:12:y:2007:i:8:p:1-6 is not listed on IDEAS
- Vasileios Zikos, 2007. "A Reappraisal of the Irrelevance result in mixed duopoly: A note on R&D competition," Economics Bulletin, AccessEcon, vol. 12(8), pages 1-6.
- Vasileios Zikos, 2007. "Equilibrium and Optimal R&D Roles in a Mixed Market," Discussion Paper Series 2007_08, Department of Economics, Loughborough University, revised Mar 2007.
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