A model of the resource allocation behavior of a group of firms demonstrates that unaided industry allocation to basic (inappropriable) research is suboptimal. Furthermore, provision of seed money is generally counterproductive, while the provision of a matching subsidy is not very...

In a recent paper we showed that unaided industry allocation to basic (inappropriable) research is suboptimal and that in stimulating this allocation, provision of government seed money is generally counterproductive, while the provision of matching subsidies is not cost-efficient. Here we...

Current federal policies toward interfirm cooperation in research and development are designed to maximize society's use of available technology. Models of industry resource allocation behavior demonstrate that these policies are detrimental to the formation of risk sharing consortia for the...