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R&D Output Sharing in a Mixed Duopoly and Incentive Subsidy Policy

Author

Listed:
  • Lee, Sang-Ho
  • Muminov, Timur

Abstract

This study investigates the incentives for R&D output sharing in a mixed duopoly and shows that public firm chooses full sharing of their R&D output, whereas private firm enjoys free-riding. We then devise an agreement-based incentive R&D subsidy scheme, which can internalize R&D spillovers and induce both firms to earn higher payoffs through full sharing of their R&D output. We also show that an R&D subsidy policy is welfare-superior to a production subsidy policy.

Suggested Citation

  • Lee, Sang-Ho & Muminov, Timur, 2017. "R&D Output Sharing in a Mixed Duopoly and Incentive Subsidy Policy," MPRA Paper 81732, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:81732
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    File URL: https://mpra.ub.uni-muenchen.de/81732/1/MPRA_paper_81732.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Agreement-based R&D subsidy; Mixed duopoly; Production output subsidy; R&D output sharing;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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