This paper evaluates how R&D subsidies to the business sector are typically awarded. We identify two sources of ine …_- ciencies we propose mechanisms that include some form of an auction in which applicants bid for subsidies. Our proposals are …

their creditworthiness and compare different types of subsidies with indirect subsidization through public banks. We find … that, in a large parameter range, the politician prefers public banks to direct subsidies because they avoid windfall gains … subsidies. One important prerequisite for this result is that public banks must not be allowed to fully compete with private …

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric … Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where …

performance of our mechanism. Finally, we discuss how the mechanism can be applied to award R&D subsidies. …

using derivatives beyond their net assets (e.g., by selling credit default swaps protection with a notional amount equal to …