We attempt to explain the observation that rival firms often share their technologies. We show that the trading of technical information over the long haul can be sustained as an equilibrium in supergames. The strategy of ejection of a cheating firm from a technology-trading coalition, followed...

In this article we examine the interaction between firms' product and process innovation decisions, and the role patent policy can play in directing technological change toward a socially efficient mix of innovations. Product innovation is a variant on a pioneer's new product; process innovation...

It has recently been suggested in the agency literature that moral hazard in teams can be dealt with by introducing a third party who breaks the budget-balancing constraint, and that this facilitates the design of contracts that can sustain the Pareto optimum as a (perfect) Nash equilibrium....