Output and R&D subsidies in a mixed oligopoly

Lee, Sang-Ho and Tomaru, Yoshihiro (2017): Output and R&D subsidies in a mixed oligopoly. Published in: Operations Research Letters No. 45 (April 2017): pp. 238-241.

Abstract

We analyze an oligopoly where public and private firms compete in quantity and R&D. Using general functions, we show that an output subsidy and an R&D tax can achieve the first-best allocation. Moreover, the degree of privatization does not influence the optimal output subsidy but does influence the optimal R&D tax.

• Item Type: MPRA Paper
• Language: English
• Keywords: R&D subsidy; Output subsidy; Mixed oligopoly; Partial privatization
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise

References

K. Fjell, J.S. Heywood, Mixed oligopoly, subsidization and the order of firm’s moves: The relevance of privatization, Econ. Lett. 83 (2004) 411–416.

M. Gil-Moltó, J. Poyagotheotoky, V. Zikos, R&D subsidies, spillovers and privatization in mixed markets, South. Econ. J. 78 (2011) 233–255.

K. Kato, Y. Tomaru, Mixed oligopoly, privatization, subsidization, and the order of firms’ moves: Several types of objectives, Econ. Lett. 96 (2007) 287–292.

D. Kesavayuth, V. Zikos, R&D versus output subsidies in mixed markets, Econ. Lett. 118 (2013) 293–296.

T. Matsumura, Partial privatization in mixed duopoly, J. Public. Econ. 70 (1998) 473–483.

T. Matsumura, Y. Okumura, Privatization neutrality theorem revisited, Econ. Lett. 118 (2013) 324–326.

T. Matsumura, Y. Toamru, Mixed duopoly, privatization, and subsidization with excess burden of taxation, Can. J. Econ. 46 (2013) 526–554.

Y. Tomaru, M. Saito, Mixed duopoly, privatization and subsidization in an endogenous timing framework, Manch. Sch. 78 (2010) 41–59.

M.D. White, Mixed oligopoly, privatization and subsidization, Econ. Lett. 53 (1996) 189–195.

V. Zikos, A reappraisal of the irrelevance result in mixed duopoly: A note on R&D competition, Econ. Bull. 12 (2007) 1–6.