Environmental innovation prizes
There are at least two reasons to support private R&D: First, the R&D process generates knowledge spillovers from which all future innovators will benefit. Second, even if the innovator succeeds to patent her new idea, she will not be able to appropriate the full social benefit of her innovation. This project focuses on the appropriability problem for supporting R&D and how three technology push policies -Patent systems, Innovation prizes and Subsidies to R&D projects - should be designed in order to overcome the appropriability problem. A key question is to what degree there are systematic differences between market goods R&D and environmental R&D, and if so, how that transforms into optimal design of the three policy instruments.