Public Policy Towards R&D in Oligopolistic Industries
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 is high.
Year of publication: |
1995-11
|
---|---|
Authors: | Leahy, D ; Neary, J.P. |
Institutions: | Centre for Economic Performance, LSE |
Saved in:
Saved in favorites
Similar items by person
-
Leahy, D, (1995)
-
R&D Spillovers and the Case for Industrial Policy in an Open Economy
Leahy, D, (1997)
-
Strategic Trade and Industrial PolicyTowards Dynamic Oligopolies
Leahy, D, (1998)
- More ...