How to allocate R&D (and other) subsidies: An experimentally tested policy recommendation
This paper evaluates how R&D subsidies to the business sector are typically awarded. We identify two sources of ine_ciency: the selection based on a ranking of individual projects, rather than complete allocations, and the failure to induce competition among applicants in order to extract and use information about the necessary funding. In order to correct these ine_- ciencies we propose mechanisms that include some form of an auction in which applicants bid for subsidies. Our proposals are tested in a simulation and in controlled lab experiments. The results suggest that adopting our proposals may considerably improve the allocation.
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Manuel Trajtenberg, 2002.
"Government Support for Commercial R&D: Lessons from the Israeli Experience,"
in: Innovation Policy and the Economy, Volume 2, pages 79-134
National Bureau of Economic Research, Inc.
- Trajtenberg, M., 2001. "Government Support of Commercial R&D: Lessons from the Israeli Experience," Papers 2001-8, Tel Aviv.
- José García-Quevedo, 2004. "Do Public Subsidies Complement Business R&D? A Meta-Analysis of the Econometric Evidence," Kyklos, Wiley Blackwell, vol. 57(1), pages 87-102, 02.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Martin, Stephen & Scott, John T., 2000.
"The nature of innovation market failure and the design of public support for private innovation,"
Elsevier, vol. 29(4-5), pages 437-447, April.
- Stephen Martin & John T. Scott, 1999. "The Nature of Innovation Market Failure and the Design of Public Support for Private Innovation," CIE Discussion Papers 1999-02, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Eickelpasch, Alexander & Fritsch, Michael, 2005.
"Contests for cooperation--A new approach in German innovation policy,"
Elsevier, vol. 34(8), pages 1269-1282, October.
- Eickelpasch, Alexander & Fritsch, Michael, 2005. "Contests for Cooperation: A New Approach in German Innovation Policy," Freiberg Working Papers 2005,03, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
- Alexander Eickelpasch & Michael Fritsch, 2005. "Contests for Cooperation: A New Approach in German Innovation Policy," Discussion Papers of DIW Berlin 478, DIW Berlin, German Institute for Economic Research.
- Czarnitzki, Dirk & Fier, Andreas, 2001. "Do R&D subsidies matter? Evidence for the German service sector," ZEW Discussion Papers 01-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:35:y:2006:i:9:p:1261-1272. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.