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There are two players: a government, G, and a firm, F. The firm can choose to invest in a Research and Development project, denoted by
There are two players: a government, G, and a firm, F. The firm can choose to invest in a Research and Development project, denoted by R, or not invest in Research and Development a project, denoted by N. If the firm chooses R, it gets a payoff of pa c, where pe [0, 1] is the level of patent protection given to the firm, a > 0) is the profit generated by the research, and c > 0) is the cost of research. Assume that c
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