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| Author: | Leahy, D. Neary, P. |
| Title: | Public policy towards R&D in oligopolistic industries |
| Journal: | American Economic Review
1997 : SEP, VOL. 87:4, p. 642-662 |
| Index terms: | ECONOMICS PUBLIC POLICY R&D |
| Language: | eng |
| Abstract: | The authors consider the free-market and socially optimal outcomes in a general oligopoly model with many firms which first engage in R&D and then compete in either output or price. Strategic behavior by firms tends to reduce output, R&D, and welfare and so justifies higher subsidies except when R&D spillovers are low and firms' actions are strategic substitutes. It also reduces the benefits of R&D cooperation. Moreover, policies to encourage cooperation are likely to be redundant and simulations suggest that the welfare cost of lax competition policy is high. |
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