The Sensitivity of Strategic and Corrective R&D Policy in Battles for Monopoly

Preprint
Publisher Website
Google Scholar
    • preprint
      • Published in RePEc
Abstract
The authors characterize the role for R&D subsidies in export markets where R&D is an uncertain process and the winner of the R&D competition monopolizes the market. Investments are assumed to induce either first order or mean-preserving second order shifts in the distribution of a firm's costs or, reinterpreting the model as a patent race, a firm's discovery dates. The authors show that, regardless of which form the uncertainty takes, a national strategic incentive to subsidize R&D exists but must be balanced against a national corrective incentive to tax R&D whenever a country has multiple firms involved in the R&D competition. Copyright 1992 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association. (This abstract was borrowed from another version of this item.)
All Related Versions

This publication has 0 references indexed in Scilit: