A simple dynamic general equilibrium model of savings and investment is populated by agents with Kreps-Porteus preferences. Households are heterogeneous in their risk aversion, which explains the negative relationship between aggregate investment and aggregate uncertainty. Agents trade a...

We present a dynamic duopoly model of technical innovation where R&D costs decrease exogenously with time, and inter-firm knowledge spillover lowers the second comer's R&D cost. The spillover effect only becomes available after a disclosure lag. These features allow us to identify a new type of...

In our duopoly, an irreversible investment incorporates a significant amount of R&D, so that the improvement it introduces in production processes generates a spillover lowering the second comer's investment cost. The presence of the inter-firm spillover substantially affects the equilibrium of...

A wider RJV extension hastens process innovations at the cost of increasing collusion in the final market. In a Cournot model, an extended RJV is welfare enhancing only when the Antitrust Authority is strong, so that the increase in distortion is limited, and when the size of the technical...

We study information acquisition in a framework characterized by strategic complementarity or substitutability. Agents’ actions are based on costly public and private signals, the precisions of which are set by a policy maker and by private agents, respectively. The policy maker – acting as...

These notes provide an intuitive introduction to dynamic programming. The first two Sections present the standard deterministic Ramsey model using the Lagrangian approach. These can be skipped by whom is already acquainted with this framework. Section 3 shows how to solve the well understood...

In a beauty contest framework, we show that more precise public information contributes to higher welfare when the precision of private information is endogenous. We consider a Stackelberg game in which public authorities decide the accuracy of public information taking into account how this...

We develop a dynamic duopoly, where firms have to take into account a technological externality, that reduces over time their innovation costs, and an inter-firm spillover, that lowers only the second comer's R&D cost. This spillover exerts its effect after a disclosure lag. We identify three...