We study a three-stage, asymmetric duopoly game of R&D rivalry. The stages are: (1) development of an innovation; (2) fixed-fee licensing of the innovation; and (3) sale of the final product. We find that major innovations will not be licensed, but that equally efficient firms will tend to...

This paper discusses firm behavior, market performance, and the public and private institutions that arise in systems markets, i.e., markets where consumers use compatible components together to generate benefits. In such markets, which include communications networks and 'hardware/software'...

The <i>Journal of Economic Literature</i> regularly reviews books of interest to the economics profession. The 2006 <i>Economic Report of the President (ERP)</i> falls under that purview. In the reviews that follow, Martin Feldstein reviews the overview chapter of the as well as topics relating to...