Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/221463 
Year of Publication: 
1994
Series/Report no.: 
Discussion Paper No. 1107
Publisher: 
Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science, Evanston, IL
Abstract: 
Research Joint Ventures and subsidies are important R&D policy instruments. The regulator, however, is unlikely to know all the relevant information to regulate R&D optimally. The extent to which there are appropriability problems is one such variable that is private information to the firms within the industry. In a duopoly setting we analyze the characteristics of a first-best and second-best R&D policy where the government can either allow Research Joint Ventures or not and give lump-sum subisides to the parties involved. The second-best R&D policy improves upon the policy of an unsophisicated government by integrating reports of the firms on their spillovers and the correlation between the R&D spillovers of the firms into its formulation.
Document Type: 
Working Paper

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