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Subsidizing the R&D Expenditures for a Monopoly Firm: Advice for NIST


  • Jannett Highfill

    (Bradley University)

  • Robert Scott

    (Bradley University)


The Advanced Technology Program (ATP) of the National Institute for Standards and Technology (NIST) subsidizes the R&D expenditure of large single firms at a maximum rate of 40%. The theoretical analysis herein of a monopoly innovator suggests that this subsidy rate is about socially optimal when spillovers to other industries are small and only incremental R&D expenditure is subsidized. The optimal subsidy when these two conditions are not met is also discussed.

Suggested Citation

  • Jannett Highfill & Robert Scott, 2007. "Subsidizing the R&D Expenditures for a Monopoly Firm: Advice for NIST," Journal of Economic Insight (formerly the Journal of Economics (MVEA)), Missouri Valley Economic Association, vol. 33(2), pages 21-40.
  • Handle: RePEc:mve:journl:v:33:y:2007:i:2:p:21-40

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    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy


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