Social Value of Innovations, Distortions, and R&D Investments: First Best versus Second Best Equilibria in Growth Models

In this paper, we make a synthesis between the literature on endogenous growth, and the literature on the funding of innovations developed by authors like for in-stance Arrow (1962), Tirole (1988), Scotchmer (1991, 1999), Dasgupta et al (1996), Gallini and Scotchmer (2003). Then, we shed a new light on several questions often studied in these literatures. The first one is related to the social value of innovations. The second one concerns the distortions that prevent the decentralized economy to be optimal. The third one concerns insufficient investments which are observed in research