Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Technology and Innovation
Matching Public Support For Private Product-Innovating R&D: A Theoretical Analysis, Pavlo Buryi, Sajal Lahiri
Matching Public Support For Private Product-Innovating R&D: A Theoretical Analysis, Pavlo Buryi, Sajal Lahiri
Faculty Works
This paper develops a theoretical model of product innovation where research and development (R&D) effort by a monopolist firm is endogenous and its outcome uncertain. The government attempts to aid such efforts with a matching grant. We consider different scenarios depending on whether two parties act simultaneously, act sequentially, or take part in a dynamic cooperative game with a trigger strategy. We also consider cases (i) when the products are exported, (ii) when the firm lobbies for R&D subsidy, and (iii) when the firm is foreign owned. We characterize situations when government intervention increases the chances of product innovation and …