DP276 Strategic R&D Policy

Author(s):	John Beath, Yannis Katsoulacos, David Ulph
Publication Date:	October 1988
Keyword(s):	Duopoly, Industrial Policy, Innovation, Joint Ventures, R&D
JEL(s):	612, 616, 621
Programme Areas:	Applied Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=276

The outcome of technological competition between firms (or countries) depends on the resolution of two forces: the profit incentive and the competitive threat. This is illustrated using a simple duopoly model. This model is then used to analyze two policy issues: subsidizing R & D and collaborative research ventures. In evaluating the second of these, some use is made of numerical simulations.