create externalities among workers, since their utility upon accepting a contract depends on their team's performance and … therefore on their colleagues' productivity. We study the effects of such externalities in a competitive labor market if workers …-efficient separation of workers according to their productivity. We further find that externalities facilitate equilibrium existence, where …

We study innovation contests with asymmetric information and identical contestants, where contestants' efforts and … highest quality and receives the revenue generated by the innovation. We characterize the equilibrium behavior, outcomes and …

early stages or to protect mature firms from competition to appropriate these externalities. However, non … externalities appear along the lifecycle. In a simple model, we show that it may be efficient to subsidize innovative firms in their …-benevolent politicians may not choose efficient policies. Real-world examples indicate that politicians tend to concentrate on externalities …