We study a two-stage R&D project with an abandonment option. Two types of uncertainty influence the decision to start R&D. Demand uncertainty is modelled as a lottery between a proportional increase and decrease in demand. Technical uncertainty is modelled as a lottery between a decrease and...

This discussion paper resulted in a publication in the <I>Journal of Economic Dynamics and Control</I> (2013), 37(12), 2729-2754.<P> Existing models of R&D are not easily reconciled with four observable aspects of R&D: initial technologies ('ideas') need to be developed further, only a minority of initial...</p></i>

We study a stochastic dynamic game of process innovation in which firms can initiate and terminate R&D efforts and production at different times. We discern the impact of knowledge spillovers on the investments in existing markets, as well as on the likely structure of newly forming markets, for...

This paper examines how a radical technological innovation affects alliance formation of firms and subsequent network structures. We use longitudinal data of interfirm R&D collaborations in the biopharmaceutical industry in which a new technological regime is established. Our findings suggest...

We develop a model of an economy with several regions, which differ in scale. Within each region, workers have to search for a job-type that matches their skill. They face a trade-off between match quality and the cost of extended search. This trade-off differs between regions, because search is...

Why has job growth over the past decades been weaker in the Dutch Randstad area than in surrounding regions? In a simultaneous equations analysis, we find that employment adjusts to the regional supply of labour. Net internal migration is predominantly determined by regional housing supply and...

This paper reviews the empirical literature on growth and convergence that has addressed the importance of spatial factors. An important distinction in this literature is the one between absolute and relative location. The literature on absolute location predominantly uses non-spatial...

Existing indices measuring the spatial distribution of economic activity such as the Krugman Specialisation Index, the Hirschmann-Herfindahl index and the Ellison-Glaeser index typically do not take into account the spatial structure of the data. In this paper, we first consider traditional...

In the modern economy, cities are assumed to be in fierce competition over attracting foreign investments in leading sectors of the world economy. Despite the rich theoretical discourse on these 'wars', it remains unclear which territories are competing with each other over which types of...

This paper replicates Costa and Kahn's analysis of locational choices of couples of highly educated persons for the Netherlands. We find increasing concentration of such power couples in the urbanized western part of the country. This trend occurs in spite of the absence of an urban wage premium...