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Public Policy towards R&D in a Mixed Duopoly with Spillovers
(2006)
  • Maria Jose Gil-Molto, University of Leicester
  • Joanna Poyago-Theotoky, Loughborough University
  • Vassilios Zikos, University of Surrey
Abstract

We investigate the use of subsidies to R&D, both in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is positive and increasing in the degree of spillovers both in the private and the mixed duopoly, although it is lower for the former than for the latter. We also find support for the empirical claim that privatization is followed by a scaling down of the R&D activity. A comparative static analysis of welfare levels suggests that privatization is welfare detrimental, which lends some support to the views against the widespread adoption of privatization programs.

Publication Date
2006
Citation Information
Maria Jose Gil-Molto, Joanna Poyago-Theotoky and Vassilios Zikos. "Public Policy towards R&D in a Mixed Duopoly with Spillovers" (2006)
Available at: http://works.bepress.com/joanna_poyago_theotoky/7/