Departmental Bulletin Paper PARTIAL PRIVATIZATION AND SUBSIDIZATION IN A MIXED DUOPOLY: R&D VERSUS OUTPUT SUBSIDIES

LEE, SANG-HO  ,  MUMINOV, TIMUR K.  ,  TOMARU, YOSHIHIRO

58 ( 2 )  , pp.163 - 177 , 2017-12 , Hitotsubashi University
ISSN:0018-280x
NCID:AA00207547
Description
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. We also show that 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.
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http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/28952/1/HJeco0580201630.pdf

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