This paper analyzes the problem of deriving the law of supply from plausible restrictions onobserved input-output choices of a competitive firm, when the firm makes random input-outputdecisions. It models such random production behavior in terms of a stochastic supply function,and introduces a...

We show that if patent protection and trade secrecy generate asymmetricmarket structure, an innovator may prefer patent protection than trade secrecy even ifthe diffusion probability is higher under the former but it increases marketconcentration by preventing some imitators...