The role of public intervention in R & D | Zendy

Finger Nachum | Zendy; Mehrez Abraham | Zendy

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The role of public intervention in R & D

Author(s) -

Finger Nachum,

Mehrez Abraham

Publication year - 1985

Publication title -

managerial and decision economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.288

H-Index - 51

eISSN - 1099-1468

pISSN - 0143-6570

DOI - 10.1002/mde.4090060309

Subject(s) - decision maker , intervention (counseling) , a priori and a posteriori , set (abstract data type) , private information retrieval , economic interventionism , government (linguistics) , microeconomics , economics , business , public economics , actuarial science , computer science , management science , political science , psychology , philosophy , linguistics , computer security , epistemology , psychiatry , politics , law , programming language

The purpose of this paper is threefold: (1) we emphasize the rule of uncertainty in achieving an efficient allocation of resources to R & D activities; (2) we identify and discuss optional mechanisms that are directed at minimizing the role of uncertainty in determining R & D decisions; and (3) we analyze the role of public intervention in R & D via a formal structure. More specifically, we explain why and under what conditions a risk‐averse decision‐maker will invest less than a government in research and inventive activities. Sufficient conditions that lead to private underinvestment in these activities are established. Furthermore, if the option of buying information exists, then we identify a set of private governmental contracts that may lead to the acceptance of a research project that a priori is unfeasible.

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