The authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post-development dissemination of the innovation, such as licensing or imitation. This dissemination may cause the noninnovating firm to benefit from the discovery. When this occurs,...

In markets where advantages, e.g., network ex ternalities, are significant, firms' product compatibility choices are an import ant determinant of industry performance. This paper compares the private and soc ial incentives to achieve compatibility in a two-period duopoly model with (poss ible...

The authors study the introduction of a new product in a market with network externalities. There is a common presumption that such markets exhibit excess inertia, i.e., that they are biased toward existing products. In contrast, the authors provide conditions under which equilibrium involves...