Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185834 
Year of Publication: 
2017
Series/Report no.: 
WWZ Working Paper No. 2017/14
Publisher: 
University of Basel, Center of Business and Economics (WWZ), Basel
Abstract: 
We consider an abstract setting of the differential r&d game, where participating firms are allowed for strategic behavior. We assume the information asymmetry across those firms and the government, which seeks to support newer technologies in a socially optimal manner. We develop a general theory of robust subsidies under such one-sided uncertainty and establish results on relative optimality, duration and size of different policy tools available to the government. It turns out that there might exist multiple sets of second-best robust policies, but there always exist a naturally induced ordering across such sets, implying the optimal choice of a policy exists for the government under different uncertainty levels.
Subjects: 
technology lock-in
technological change
strategic interaction
uncertainty
robust policy sets
uncertainty thresholds
robust welfare improving policy
JEL: 
C61
O31
O38
Document Type: 
Working Paper

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