Public-Private Interface

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Public-Private Interface

• Who Funds RD? Is it the private sector that
  matters?
• Which countries spend more on RD?
• How much money does the government give the
  private sector for RD? Universities?
• How much money does the private sector give to
  universities?
• How much money goes for defense-related RD?
• What is the funding for?
• Figure 4-33 Government RD support by
  socioeconomic objectives, G-8 countries

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Who pays for RD? Dark blue public, Light
blueprivate
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Top US Funding to industry. Bottom US Funding
to universities
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The government grant processFunding Inventors
instead of Inventions?

• Why might you expect it not to work?
  Free-riding, etc. Why does no one cheat?
• Self-selection and Funding
• Value of ideas in period t
• Discounted value of future grants
• Invest if the value of cheating, c, is less than
  value of future grants (selects the
  high-fertility researchers)

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Questions about grants

• What if you are a high-cost researcher?
• What if you are a low-fertility (low-?)?
• Will the government have to over pay?

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New Hybrids IP on government-sponsored
research. Is there a rationale for granting IP on
government-subsidized research? What is the
argument against this?
cost, funds, profit
ssubsidy, mfirm matching requirement, vvalue,
?vTprofit