This paper develops two extensions of the dynamic model presented in Melitz (2003). The first extension consists in the introduction of technology choice between three alternative production technologies: L, M and H. L is assumed to be the same as Melitz's single production technology, while M...

AT&T was known for both funding a world-class research lab and delaying deployment of useful innovations from the lab. To explain this behavior we consider a model with an incumbent facing a potential entrant. The incumbent can choose from two technologies for production: old and new. The...

When a continuum of technologies is introduced to the model of Grossman and Helpman (1991), both continuous and discrete technological progress may occur as a result of technology choices by private firms. A good is created through R&D based on one of a continuum of technologies that differ in...

It is believed that the primary economic solution to climate change is an introduction of a carbon pricing system anchored to the social cost of carbon, either as a form of tax or tradable permits. Potentially significant externalities accompanying the introduction of emission-reducing...

It is often emphasized that the primary economic solution to climate change is the introduction of a carbon pricing system (tax or tradable permits) anchored to the social cost of carbon. This standard argument, however, misses the fact that if emission reduction is sought through the use of...

In this paper, we present a spatial model of the public provision of the performing arts. Agents behave boundedly rational. Art directors set performance quality according to their aspiration levels. While taking into account the spatial distribution of the population, administrative directors...

We consider a linear city model where both firms and consumers have to incur transport costs. Following a standard Hotelling (1929) type framework we analyze a duopoly where firms facing a continuum of consumers choose locations and prices, with the transportation rate being linear in distance....

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...

This paper discusses a simultaneous market entry game between two firms with different fixed costs. This case is a typical application of mixed strategy equilibria. Conventional wisdom would suggest that the low-cost firm is more likely to enter the market. This presumption is wrong. Instead,...

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...