We examine the use of subsidies to research and development (R&D) in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is increasing in the degree of spillovers, but it is lower in the private duopoly. The optimal R&D subsidy leads to an increase in total R&D...

We study firms' adoption of flexible technologies in the context of a mixed versus a private duopoly with product differentiation. As opposed to a dedicated technology, a flexible technology allows a firm to become multiproduct or multimarket without bearing additional costs. We find that a...