Jinji, Naoto; Toshimitsu, Tsuyoshi - Graduate School of Economics, Hitotsubashi University - 2004
We examine the optimal R&D subsidy/tax policy under a vertically differentiated duopoly. In a significant departure from the existing work, we consider the case of asymmetric costs of product R&D where there is a small technology gap between firms. In our analysis, the endogeneity of quality...