Research Joint Ventures, Licensing, and Industrial Policy

This paper reconsiders the explanation of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to license their innovations and to pool their R&D investments. We show that in equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the export oligopoly game. Nevertheless, national governments are driven to subsidize their own national firms in order to increase their strength in the joint venture bargaining game. Therefore, our analysis suggests an alternative explanation of the observed proliferation of R&D subsidies

Procurement with Costly Bidding, Optimal Shortlisting, and Rebates

We consider the procurement of a complex, indivisible good when bid preparation is costly, assuming a population of heterogeneous contractors. Shortlisting is introduced to implement the optimal number of bidders, and we explore whether the procurer should reimburse the nonrecoverable cost of preparing a bid in whole or in part. We find that a reimbursement policy is profitable for the procurer only if performance and bidding costs are negatively correlated. Moreover, negative rebates (entry fees) always dominate positive rebates

Research Joint Ventures, Optimal Licensing, and R&D Subsidy Policy

We reconsider the justifications of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to pool R&D investments and license innovations. In equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the subsequent oligopoly game. Nevertheless, governments subsidize their domestic firms in order to raise their bargaining position in the joint venture. This holds true regardless of whether governments offer either unconditional or conditional subsidies. This suggests an alternative explanation of the observed proliferation of R&D subsidies

Research Joint Ventures, Licensing, and Industrial Policy

This paper reconsiders the explanation of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to license their innovations and to pool their R&D investments. We show that in equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the export oligopoly game. Nevertheless, national governments are driven to subsidize their own national firms in order to increase their strength in the joint venture bargaining game. Therefore, our analysis suggests an alternative explanation of the observed proliferation of R&D subsidies.patent licensing; industrial organization; R&D subsidies; research joint ventures; innovation policy

Research Joint Ventures, Optimal Licensing, and R&D Subsidy Policy

We reconsider the justifications of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to pool R&D investments and license innovations. In equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the subsequent oligopoly game. Nevertheless, governments subsidize their domestic firms in order to raise their bargaining position in the joint venture. This holds true regardless of whether governments offer either unconditional or conditional subsidies. This suggests an alternative explanation of the observed proliferation of R&D subsidies.patent licensing; industrial organization; R&D subsidies; research joint ventures; technology policy

International Licensing and R&D Subsidy

R&D rivalry and optimal R&D policies are investigated in an asymmetric four-stage game that involves international licensing. It is found that a government’s R&D policy crucially depends on its domestic firm’s bargaining power over the licensing gain. When the firm’s bargaining power is greater than one half, the government subsidizes its home firm’s R&D investment, while imposes a tax if the firm’s bargaining power is less than one half. Additionally, this result does not depend on the status of the firm (the licensor or the licensee). Finally, the effects of two different licensing contracts (fixedfee v.s. royalty per unit) on governments’ optimal R&D policies are investigated. ZUSAMMENFASSUNG - (Internationale Lizenzierungen und F&E Beihilfen) Der Beitrag beschäftigt sich mit Innovationswettbewerb und der Rolle von nationaler Politik im Falle von internationalen Lizenzierungspraktiken. In einem mehrstufigen Spiel werden die Anreizmechanismen untersucht. Es stellt sich heraus, daß die Verhandlungsstärke der nationalen Unternehmen im Lizenzierungsmarkt eine wichtige Rolle spielen. So erfolgt aus nationaler Sicht eine Subvention (Besteuerung) von F&EInvestitionen immer dann, wenn die Verhandlungsmacht groß (klein) ist. Darüber hinaus untersucht der Beitrag die Konsequenzen unterschiedlicher Lizenzierungspraktiken auf die optimale nationale F&E-Politik.International Licensing; R&D Subsidy; R&D Investment

Procurement with Costly Bidding, Optimal Shortlisting, and Rebates

We consider the procurement of a complex, indivisible good when bid preparation is costly, assuming a population of heterogeneous contractors. Shortlisting is introduced to implement the optimal number of bidders, and we explore whether the procurer should reimburse the nonrecoverable cost of preparing a bid in whole or in part. We find that a reimbursement policy is profitable for the procurer only if performance and bidding costs are negatively correlated. Moreover, negative rebates (entry fees) always dominate positive rebates.Procurement; Auctions; Entry

Horizontal mergers with synergies: first-price vs. profit-share auction

We consider takeover bidding in a Cournot oligopoly when firms have private information concerning the synergy effect of merging with a takeover target. Two auction rules are considered: standard first-price and profit-share auctions, supplemented by entry fees. Since non-merged firms benefit from a merger if the synergies are low, bidders are subject to a positive externality. Nevertheless, pooling does not occur; and the profit-share auction is strictly more profitable than the first-price auction, regardless of whether firms observe the synergy parameter or only the winning bid before they play the oligopoly game

Modeling and Assessing the Sustainability of Dams in the United States

Dam decision-making is often controversial as a choice has to be made between the benefits provided by dams (e.g., recreation, water supply, hydropower) and their potential negative impacts (e.g., effects on natural flow regime, impediment for fish migration). However, our understandings of such tradeoffs under a full range of dam management alternatives remain limited which hinders our ability to make sound and scientifically defensible dam management decisions. The diverse stakeholders involved in the decision-making process with varying perspectives and preferences could further exacerbate the difficulty of decision-making. To advance our knowledge in sustainable dam decision-making, this dissertation developed modeling tools to evaluate dam decisions based on greenhouse gas (GHG) emissions, hydropower generation, sea-run fish population, and management cost from both spatial and temporal perspectives. The developed model was further applied in role-paly simulation workshops to investigate the potential differences between scientifically optimized decisions and the negotiated consensus. The results revealed that although most hydroelectric dams have comparable GHG emissions to other types of renewable energy (e.g., solar, wind energy), electricity produced from tropical reservoir-based dams could potentially have a higher emission rate than fossil-based electricity. It is possible to simultaneously optimize energy, fish, and cost outcomes through strategic dam management actions. Basin-scale management strategies may outperform individual dam management strategies because the former can provide a broader set of solutions for balancing complex tradeoffs than the latter. Furthermore, diversification of management options (e.g., combination of fishway installations, dam removals, and generation capacity) may have the highest potential in balancing fish-energy-cost tradeoffs. Finally, dam management negotiation is helpful in facilitating decisions with more balanced outcomes but not necessary reflect the environmentally optimal outcomes

Horizontal mergers with synergies: first-price vs. profit-share auction

We consider takeover bidding in a Cournot oligopoly when firms have private information concerning the synergy effect of merging with a takeover target. Two auction rules are considered: standard first-price and profit-share auctions, supplemented by entry fees. Since non-merged firms benefit from a merger if the synergies are low, bidders are subject to a positive externality. Nevertheless, pooling does not occur; and the profit-share auction is strictly more profitable than the first-price auction, regardless of whether firms observe the synergy parameter or only the winning bid before they play the oligopoly game.Horizontal mergers; takeovers; auctions; externalities; oligopoly