The decision to cooperate within R&D joint ventures is often based on `expert advice.' Such advice typically originates in a due diligence process, which assesses the R&D joint venture's profitability, for example, by appraising the achievability of synergies. We show that if the experts who...

Firms sign an integration contract with the purpose of increasing their expected profits from trade and competition with third parties. Gains depend on how the contract improves the partners' production function (e.g. better synergies, organization, etc.), and how it increases their power in the...

In many models of interdependent preferences the payoffs have not only personal value but also enter the social part of the utility. This duality creates a problem of distinguishing what influences the choice more: consumption or social concerns. To identify what drives the behavior it is...

In this paper we identify how changes in the income tax rate affect the labour supply under interdependent utility functions. To reach that aim we create a model of the economy in which households choosing their optimal labour supply take into account not only their income, tax rate and...

For several years, an increasing number of firms are investing in Open Source Software (OSS). While improvements in such a non-excludable public good cannot be appropriated, companies can benefit indirectly in a complementary proprietary segment. We study this incentive for investment in OSS. In...

The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising...

Linear demand formulations for price competition in horizontally differentiated products are sometimes used to compare situations where additional varieties become available, e. g. due to market entry of new firms. We derive a consistent demand system to analyze such situations.

In many countries entrepreneurship is promoted through tax reductions for small businesses and by various government support schemes. We analyze the effects of such policies to subsidize small businesses in a setting where both the risk-return characteristics of the selected innovation project...

In the framework Hotelling-Downs competition two players can freely choose a position along a one-dimensional market. We introduce restrictions of feasible strategies and analyze the consequences for players and consumers. In equilibrium players may minimally differentiate away from the center...

The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising...