Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298310 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 125
Publisher: 
Università Cattolica del Sacro Cuore, Dipartimento di Economia e Finanza (DISCE), Milano
Abstract: 
How should firms be incentivized to adopt new technologies when the technical merits and spillovers of such technologies are uncertain? We show that, when information is dispersed but exogenous, efficiency can be induced with simple (constant) subsidies. When, instead, firms must also be incentivized to collect information efficiently, subsidies must be conditioned on the ex-post profitability of the new technology and, when the cost of information acquisition is unknown to the planner, on the aggregate investment in the new technology. The optimal policy has a Pigou's flavor but accounts for the non-observability of firms' acquisition and usage of information.
Subjects: 
endogenous information
investment spillovers
optimal policy
welfare
JEL: 
D21
D62
D83
Document Type: 
Working Paper

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