We analyse economic welfare in R&D intensive industries under varying assumptions on the spillover process. The focus lies on spillover processes with complementary R&D investments such as those modelling absorptive capacity. There spillovers give rise to both negative and positive...

We explore the design of self-financing tax-subsidy schemes to solve hold-up problems in environmental regulation. The announcement of the tax rate seems to be preferable to solve hold-up problems with respect to the investment in environmental R&D. In contrast, only the announcement of the...

In a linear model of cost reducing R&D/Cournot competition, firm asymmetry is shown to be sustainable as subgame perfect Nash equilibrium with R&D competition only if the productivity of research is sufficiently large relative to the benefits from imitation. In such a case, industry-wide cost...