R&D in clean technology: A project choice model with learning

Oikawa, Koki & Managi, Shunsuke (2015) R&D in clean technology: A project choice model with learning. Journal of Economic Behavior and Organization, 117, pp. 175-195.

View at publisher


In this study, we investigate the qualitative and quantitative effects of an R&D subsidy for a clean technology and a Pigouvian tax on a dirty technology on environmental R&D when it is uncertain how long the research takes to complete. The model is formulated as an optimal stopping problem, in which the number of successes required to complete the R&D project is finite and learning about the probability of success is incorporated. We show that the optimal R&D subsidy with the consideration of learning is higher than that without it. We also find that an R&D subsidy performs better than a Pigouvian tax unless suppliers have sufficient incentives to continue cost-reduction efforts after the new technology success-fully replaces the old one. Moreover, by using a two-project model, we show that a uniform subsidy is better than a selective subsidy.

Impact and interest:

1 citations in Scopus
1 citations in Web of Science®
Search Google Scholar™

Citation counts are sourced monthly from Scopus and Web of Science® citation databases.

These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.

Citations counts from the Google Scholar™ indexing service can be viewed at the linked Google Scholar™ search.

ID Code: 95233
Item Type: Journal Article
Refereed: Yes
Keywords: Environmental technology, Learning, R&D subsidy, Pigouvian tax
DOI: 10.1016/j.jebo.2015.06.015
ISSN: 0167-2681
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2015 Elsevier B.V.
Deposited On: 28 Apr 2016 00:16
Last Modified: 29 Apr 2016 00:03

Export: EndNote | Dublin Core | BibTeX

Repository Staff Only: item control page