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Adverse selection and financing of innovation: is there a need for R&D subsidies?

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Figure

Figure 1.  Market-based financing with different values of
Figure 2.  Extensive-form representation of the application  process with perfect screening
Figure 3.  Plausible government strategies with different  values of screening costs ( σ) and different share of  high-type entrepreneurs in the economy (p)
Figure 4.  Optimal strategies for government with different       values  of  μ  0 1(NSC, S)(NSC, NS)  SC = (NSC, S) SC = (NSC, NS)  SC=Lμμ=L
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