CONDITIONS FOR GOVERNMENT SUPPORT OF PRIVATE RESEARCH-AND-DEVELOPMENT

In a recent paper, Brockhoff and Warschkow (1993) attempt to extend Jo glekar and Hamburg's work under alternative behavioral assumptions (Jo glekar and Hamburg, 1986). Brockhoff and Warschkow mainly obtain resul ts that are opposite to Joglekar and Hamburg's findings. Unfortunately , as shown below, Brockhoff and Warschkow's model is flawed because: ( 1) it is inconsistent with Joglekar and Hamburg's assumption that firm s are individually rational, and (2) it misrepresents the concept of P areto optimality. Consequently, Brockhoff and Warschkow's conclusions cannot be seen as valid.