Kesavayuth, Dusanee; Zikos, Vasileios - In: Economics Letters 118 (2013) 2, pp. 293-296
We analyse the relative welfare effects of an R&D and an output subsidy in a mixed duopoly. We show that an R&D subsidy is beneficial for society as a whole, and socially superior to an output subsidy, when spillovers are sufficiently high. Otherwise, an output subsidy is socially superior.