Subsidizing the R&D Expenditures for a Monopoly Firm: Advice for NIST

Jannett Highfill () and Robert Scott
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Robert Scott: Bradley University

Journal of Economic Insight, 2007, vol. 33, issue 2, 21-40

Abstract: The Advanced Technology Program (ATP) of the National Institute for Standards and Technology (NIST) subsidizes the R&D expenditure of large single firms at a maximum rate of 40%. The theoretical analysis herein of a monopoly innovator suggests that this subsidy rate is about socially optimal when spillovers to other industries are small and only incremental R&D expenditure is subsidized. The optimal subsidy when these two conditions are not met is also discussed.

JEL-codes: O38 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:mve:journl:v:33:y:2007:i:2:p:21-40

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