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Partial Privatization and Subsidization in a Mixed Duopoly: R&D versus Output Subsidies

Sang-Ho Lee (), Timur Muminov () and Yoshihiro Tomaru ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates R&D and output subsidies in a mixed duopoly with partial privatization. We show that an output subsidy is welfare-superior to an R&D subsidy policy, but the government has a higher incentive to privatize the public firm under the output subsidy than the R&D subsidy. However, when the government uses the policy mix of R&D and output subsidies together, it can achieve the first-best allocation, in which the degree of privatization does not influence output subsidies but influences R&D subsidies.

Keywords: Mixed duopoly; Partial privatization; R&D subsidy; Output subsidy (search for similar items in EconPapers)
JEL-codes: H2 L1 L3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ino, nep-mic and nep-pbe
Date: 2017-06-19
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https://mpra.ub.uni-muenchen.de/79778/1/MPRA_paper_79778.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/84413/1/MPRA_paper_79778.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/84415/1/MPRA_paper_79778.pdf revised version (application/pdf)

Related works:
Journal Article: PARTIAL PRIVATIZATION AND SUBSIDIZATION IN A MIXED DUOPOLY: R&D VERSUS OUTPUT SUBSIDIES (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79778

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