IDEAS home Printed from https://ideas.repec.org/p/bsl/wpaper/2018-01.html
   My bibliography  Save this paper

Robust policy schemes for R&D games with asymmetric information

Author

Listed:
  • Bondarev, Anton

Abstract

We consider an abstract setting of the differential r&d game, where participating firms are allowed for strategic behavior. We assume the information asymmetry across those firms and the government, which seeks to support newer technologies in a socially optimal manner. We develop a general theory of robust subsidies under such one-sided uncertainty and establish results on relative optimality, duration and size of different policy tools available to the government. It turns out that there might exist multiple sets of second-best robust policies, but there always exist a naturally induced ordering across such sets, implying the optimal choice of a policy exists for the government under different uncertainty levels.

Suggested Citation

  • Bondarev, Anton, 2018. "Robust policy schemes for R&D games with asymmetric information," Working papers 2018/01, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2018/01
    as

    Download full text from publisher

    File URL: https://edoc.unibas.ch/61298/1/20180306090617_5a9e4bf9b2722.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
    2. Krysiak, Frank C., 2011. "Environmental regulation, technological diversity, and the dynamics of technological change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 528-544, April.
    3. Bondarev, Anton, 2014. "Endogenous specialization of heterogeneous innovative activities of firms under the technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 235-249.
    4. Giannis Vardas & Anastasios Xepapadeas, 2015. "Uncertainty aversion, robust control and asset holdings," Quantitative Finance, Taylor & Francis Journals, vol. 15(3), pages 477-491, March.
    5. Bondarev, Anton & Greiner, Alfred, 2018. "Catching-up and falling behind: Effects of learning in an R&D differential game with spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 134-156.
    6. Unruh, Gregory C., 2002. "Escaping carbon lock-in," Energy Policy, Elsevier, vol. 30(4), pages 317-325, March.
    7. Hinloopen, Jeroen & Smrkolj, Grega & Wagener, Florian, 2013. "From mind to market: A global, dynamic analysis of R&D," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2729-2754.
    8. Athanassoglou, Stergios & Xepapadeas, Anastasios, 2012. "Pollution control with uncertain stock dynamics: When, and how, to be precautious," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 304-320.
    9. W. Brock & A. Xepapadeas & A. Yannacopoulos, 2014. "Robust Control and Hot Spots in Spatiotemporal Economic Systems," Dynamic Games and Applications, Springer, vol. 4(3), pages 257-289, September.
    10. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    11. Dawid, Herbert & Greiner, Alfred & Zou, Benteng, 2010. "Optimal foreign investment dynamics in the presence of technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 34(3), pages 296-313, March.
    12. Frédéric Babonneau & Alain Haurie & Marc Vielle, 2013. "A robust meta-game for climate negotiations," Computational Management Science, Springer, vol. 10(4), pages 299-329, December.
    13. Giannis Vardas & Anastasios Xepapadeas, 2010. "Model Uncertainty, Ambiguity and the Precautionary Principle: Implications for Biodiversity Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(3), pages 379-404, March.
    14. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    15. Unruh, Gregory C., 2000. "Understanding carbon lock-in," Energy Policy, Elsevier, vol. 28(12), pages 817-830, October.
    16. Ben Youssef, Slim & Zaccour, Georges, 2014. "Absorptive Capacity, R&D Spillovers, Emissions Taxes and R&D Subsidies," Strategic Behavior and the Environment, now publishers, vol. 4(1), pages 41-58, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anton Bondarev & Frank C. Krysiak, 2017. "Robust policy schemes for R&D games with asymmetric information," Working papers 2017/14, Faculty of Business and Economics - University of Basel.
    2. Bondarev, Anton & Krysiak, Frank C., 2017. "Temporary and permanent technology lock-ins in the quality-differentiated Bertrand competition," Working papers 2017/09, Faculty of Business and Economics - University of Basel.
    3. Anton Bondarev, 2019. "Robust Policy Schemes for Differential R&D Games with Asymmetric Information," Dynamic Games and Applications, Springer, vol. 9(2), pages 391-415, June.
    4. Bondarev, Anton & Greiner, Alfred, 2018. "Catching-up and falling behind: Effects of learning in an R&D differential game with spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 134-156.
    5. Krysiak, Frank C., 2011. "Environmental regulation, technological diversity, and the dynamics of technological change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 528-544, April.
    6. Kalkuhl, Matthias & Edenhofer, Ottmar & Lessmann, Kai, 2012. "Learning or lock-in: Optimal technology policies to support mitigation," Resource and Energy Economics, Elsevier, vol. 34(1), pages 1-23.
    7. Timothy J. Foxon, 2014. "Technological lock-in and the role of innovation," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 20, pages 304-316, Edward Elgar Publishing.
    8. Jukka Luhas & Mirja Mikkilä & Ville Uusitalo & Lassi Linnanen, 2019. "Product Diversification in Sustainability Transition: The Forest-Based Bioeconomy in Finland," Sustainability, MDPI, vol. 11(12), pages 1-19, June.
    9. Carrillo-Hermosilla, Javier, 2006. "A policy approach to the environmental impacts of technological lock-in," Ecological Economics, Elsevier, vol. 58(4), pages 717-742, July.
    10. Foxon, T. J. & Gross, R. & Chase, A. & Howes, J. & Arnall, A. & Anderson, D., 2005. "UK innovation systems for new and renewable energy technologies: drivers, barriers and systems failures," Energy Policy, Elsevier, vol. 33(16), pages 2123-2137, November.
    11. Gürsan, C. & de Gooyert, V., 2021. "The systemic impact of a transition fuel: Does natural gas help or hinder the energy transition?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    12. Anton Bondarev, 2021. "Games Without Winners: Catching-up with Asymmetric Spillovers," Dynamic Games and Applications, Springer, vol. 11(4), pages 670-703, December.
    13. Foxon, Timothy J. & Pearson, Peter J.G. & Arapostathis, Stathis & Carlsson-Hyslop, Anna & Thornton, Judith, 2013. "Branching points for transition pathways: assessing responses of actors to challenges on pathways to a low carbon future," Energy Policy, Elsevier, vol. 52(C), pages 146-158.
    14. Schmidt, Tobias S. & Battke, Benedikt & Grosspietsch, David & Hoffmann, Volker H., 2016. "Do deployment policies pick technologies by (not) picking applications?—A simulation of investment decisions in technologies with multiple applications," Research Policy, Elsevier, vol. 45(10), pages 1965-1983.
    15. Albert Faber & Koen Frenken, 2008. "Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics," Innovation Studies Utrecht (ISU) working paper series 08-15, Utrecht University, Department of Innovation Studies, revised Apr 2008.
    16. Hannon, Matthew J. & Foxon, Timothy J. & Gale, William F., 2013. "The co-evolutionary relationship between Energy Service Companies and the UK energy system: Implications for a low-carbon transition," Energy Policy, Elsevier, vol. 61(C), pages 1031-1045.
    17. Simon Shackley & Michael Thompson, 2012. "Lost in the mix: will the technologies of carbon dioxide capture and storage provide us with a breathing space as we strive to make the transition from fossil fuels to renewables?," Climatic Change, Springer, vol. 110(1), pages 101-121, January.
    18. Leo Wangler, 2010. "Renewables and Innovation - Empirical Assessment and Theoretical Considerations," Jena Economic Research Papers 2010-002, Friedrich-Schiller-University Jena.
    19. Rebekah Brown & Richard Ashley & Megan Farrelly, 2011. "Political and Professional Agency Entrapment: An Agenda for Urban Water Research," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(15), pages 4037-4050, December.
    20. Michael Grubb & Jean-Francois Mercure & Pablo Salas & Rutger-Jan Lange & Ida Sognnaes, 2018. "Systems Innovation, Inertia and Pliability: A mathematical exploration with implications for climate change abatement," Working Papers EPRG 1808, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

    More about this item

    Keywords

    technology lock-in; technological change; strategic interaction; uncertainty; robust policy sets; uncertainty thresholds; robust welfare improving policy; axiom of choice;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bsl:wpaper:2018/01. 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: . General contact details of provider: https://edirc.repec.org/data/wwzbsch.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: WWZ (email available below). General contact details of provider: https://edirc.repec.org/data/wwzbsch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.