Working Paper


J. Peter Neary
Dermot Leahy



o32 research industrial government policy strategic aspects of public policy r d spillovers research industrial l13 research joint ventures d43 commercial policy oligopolies research development r d cooperation subgame perfect equilibrium

Public policy towards R&D in oligopolistic industries (1995)

Abstract This paper examines the free-market and socially-optimal outcomes in a dynamic oligopoly model with R&D spillovers. First-best optimal subsidies to R&D are higher when firms play strategically against each other, but lower when they cooperate on R&D (at least with high spillovers) and when they play strategically against the government. Second-best optimal subsidies to R&D are presumptively higher than first-best ones, but policies to encourage cooperation are likely to be redundant (since it is always privately profitable) and simulations suggest that the welfare cost of lax competition policy is high.
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Full list of authors on original publication

J. Peter Neary, Dermot Leahy

Experts in our system

J. Peter Neary
University College Dublin
Total Publications: 79
Dermot Leahy
Maynooth University
Total Publications: 50