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Subsidizing R&D-Cooperatives

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Abstract

A framework is developed with which both R&D-subsidies and R&D-cooperatives can be analyzed. It is shown that in most cases providing R&D-subsidies is more effective in promoting private R&D than allowing for an R&D-cooperative. Moreover, considering the implementation of both R&D stimulating policies simultaneously reveals that R&D-cooperatives are redundant. The preferred R&D stimulating policy is to optimally subsidize RJVs.

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