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Robust policy schemes for R&D games with asymmetric information

Anton Bondarev ()

Working papers from Faculty of Business and Economics - University of 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.

Keywords: technology lock-in; technological change; strategic interaction; uncertainty; robust policy sets; uncertainty thresholds; robust welfare improving policy; axiom of choice (search for similar items in EconPapers)
JEL-codes: C02 C61 O31 O38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-gth, nep-ino and nep-mic
Date: 2018-01-16
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2018/01

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