R&D Information sharing in a mixed duopoly and incentive subsidy for research joint venture competition

This study investigates the incentives for R&D (research and development) information sharing in a mixed duopoly and finds a contrasting result that public firm chooses full sharing while private firm enjoys free‐riding. We then devise an agreement‐based incentive R&D subsidy scheme for RJV (research joint venture) competition, which can internalize R&D spillovers between firms and induce them to earn higher payoffs through full sharing of their R&D information. We also discuss welfare loss of the proposed R&D subsidy scheme, compare with production subsidy and provide some policy‐relevant implications on privatization.