We provide a theoretical justification for bi-sourcing, which refers to thesituation where a final goods producer buys an input from an outside supplier and alsoproduces it in-house. Bi-sourcing occurs if the marginal cost of producing the input inhouseis higher than the marginal cost of outside...

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...

This paper analyzes the problem of deriving predictions, regarding supply behavior of acompetitive firm, from prior consistency postulates about input-output choices made by such afirm. It extends the literature by introducing a consistency postulate for firm choice, which isweaker than...