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Innovation subsidy under duopoly

descriptionPublicationkeyboard_double_arrow_right Article , Journal 23 Jan 2020Publisher:WileyJournal:Managerial and Decision Economics, volume 41, pages 362-370 (issn: 0143-6570, eissn: 1099-1468,

Authors: Pu‐Yan Nie; Xu Xiao; Chan Wang; Ting Cui;

doi: 10.1002/mde.3105

Innovation subsidy under duopoly

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Abstract

Innovation plays extremely important roles in the society, and underinvestment in innovation popularly exists. This article aims to capture innovative subsidy with game theory model. First, unilateral subsidy stimulates both innovation and outputs of subsidized firms, while it deters those of opponents. Second, under innovation subsidy, relationship between subsidized firm's innovation and product substitutability satisfies a U shape. For opponents, it is also a U‐shaped relationship. Third, under unilateral subsidy, subsidizing high‐efficiency firms yields more innovation than subsidizing low‐efficiency firms. Finally, bilateral subsidy stimulates more innovation than unilateral subsidy. This study supports theory to subsidize innovation efficiently.

Related Organizations

Guangdong University of Business Studies
China (People's Republic of)
University of Finance and Economics
Mongolia
Guangdong University of Business Studies
China (People's Republic of)

Impact byBIP!

	citations This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).	18
	popularity This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.	Top 10%
	influence This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).	Average
	impulse This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.	Top 10%