Knowledge transfer, transitional dynamics and optimal Research & Development policy in a dynamic monopoly setting
Veröffentlichungsdatum
2020
Autoren
Zusammenfassung
This paper focuses on the question whether or not a reduction of the knowledge barrier is good for welfare. Based on a dynamic monopoly setting with simultaneous investment decisions in process as well as in product Research & Development (R&D), we show that a reduction of the knowledge barrier has ambiguous welfare consequences: Due to a lower knowledge barrier, product quality and welfare increase in the short-run. However, this may not necessarily be the case in the long-run. One reason is that a positive long-lasting knowledge barrier shock triggers the monopolist to sub-optimally lower its product R&D investments today and in the future at the cost of future product quality. This in turn may reduce welfare. Accordingly, to realize the first-best level of product quality, the long-run optimal R&D subsidy rate for product innovations increase with a reduction of the knowledge barrier.
Schlagwörter
Process and product innovation
;
learning by doing
;
knowledge spillovers
;
optimal taxation
;
dynamic monopoly analysis
Institution
Fachbereich
Dokumenttyp
Artikel/Aufsatz
Zeitschrift/Sammelwerk
Seitenzahl
29
Zweitveröffentlichung
Nein
Sprache
Deutsch
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00108533-1.pdf
Size
2.21 MB
Format
Adobe PDF
Checksum
(MD5):c22c2bf52309a1a65baf6d036797efea