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Public policy towards R&D in oligopolistic industries
Leahy, Dermot; Neary, J. Peter
This paper examines the free-market and socially-optimal outcomes in a dynamic oligopoly model with R&D spillovers. First-best optimal subsidies to R&D are higher when firms play strategically against each other, but lower when they cooperate on R&D (at least with high spillovers) and when they play strategically against the government. Second-best optimal subsidies to R&D are presumptively higher than first-best ones, but policies to encourage cooperation are likely to be redundant (since it is always privately profitable) and simulations suggest that the welfare cost of lax competition policy is high. A hard copy is available in UCD Library at GEN 330.08 IR/UNI
Keyword(s): Research & Development; R&D spillovers; R&D cooperation; Research joint ventures; Subgame perfect equilibrium; Strategic aspects of public policy; D43; L13; O32; Research, Industrial; Commercial policy; Research, Industrial--Government policy; Oligopolies
Publication Date:
Type: Working paper
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
Publisher(s): University College Dublin. School of Economics
File Format(s): other; application/pdf
First Indexed: 2012-08-25 05:21:54 Last Updated: 2018-10-11 15:42:41