An innovative firm with private information about its indivisible process innovation chooses strategically whether to apply for a patent with probabilistic validity or rely on secrecy. By doing so, the firm manages its rivals' beliefs about the size of the innovation, and affects the incentives...

The decision to cooperate within R&D joint ventures is often based on expert advice such advice typically originates in a due diligence process, which assesses the R&D joint ventures profitability, for example, by appraising the achievability of synergies. We show that if the experts who advise...

This paper analyses an entry timing game with uncertain entry costs. Two firms receive costless signals about the cost of a new project and decide when to invest. We characterize the equilibrium of the investment timing game with private and public signals. We show that competition leads the two...

The immediate expensing of R&D expenditures conceals managers' knowledge about the R&D projects. I examine whether higher R&D-intensive firms voluntarily guide more to decrease this information asymmetry. R&D state tax credits serve as instrumental variable for R&D investments. While total...

An innovative firm chooses strategically whether to patent its process innovation or rely on secrecy. By doing so, the firm manages its rival’s beliefs about the size of the innovation, and affects the incentives in the product market. Different measures of competitive pressure in the product...

Models of choice where agents see others as less sophisticated than themselves have significantly different, sometimes more accurate, predictions in games than does Nash equilibrium. When it comes to mechanism design, however, they turn out to have surprisingly similar implications. This paper...

Consumers often complain that retail prices respond faster to increases in wholesale prices than to decreases. Despite many empirical studies confirming this "Rockets-and-Feathers" phenomenon for different industries, the mechanism driving it is not well understood. In this paper, we show that,...

Many studies have found a gap between willingness-to-pay and willingness-to-accept that is inconsistent with standard theory. There is also evidence that the gap is eroded by experience gained in the laboratory and naturally occurring markets. This paper argues that the gap and the effects of...

The impact of large commercial farms on neighbouring smallholders in low-income sub-Saharan Africa remains controversial. Bringing evidence to a largely anecdotal debate, we deploy a dataset covering all commercial farms in Mozambique, linking them to a nationally representative survey of...

We study the effect of alleviating information asymmetry regarding product quality that is widespread in developing-country agricultural markets. Opportunistic buyers may underreport quality levels back to farmers to reduce the price they have to pay. In response, farmers may curb investment,...