privatization_R%26D.pdf (205.62 kB)
Public policy towards R&D in a mixed duopoly with spillovers
preprintposted on 2006-10-10, 08:28 authored by Maria Jose Gil-Molto, Joanna Poyago-Theotoky, Vasileios Zikos
We 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 nd 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.
- Business and Economics
Publisher© Loughborough University
NotesEconomics Research Paper, no. 06-17