The externality problem tends to be more severe for applied research than for basic research.

Question

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The externality problem tends to be more severe for basic research than for applied research. This is because basic research is often more abstract and less directly connected to practical applications, making it harder to capture the benefits and allocate the costs among different parties. Applied research, on the other hand, is usually more focused on solving real-world problems and can generate more tangible benefits, making it easier to incentivize private investment and capture the social return.

The Externality Problem Tends to Be More Severe for Applied