This paper develops a theoretical model to study how investment decisions in innovation taken by a single agent are influences by environmental externalities produced by investment decisions taken by other agents. The model acts in a dynamic framework, where knowledge stock represents the...

Technological innovations are inherently problematic (risky, uncertain, possess public goods properties (enhances free-riding since it is easy to steal), but once they succeed, they create negative externalities for incumbents in the form of economic resources redistribution. Economic resources...

The challenge of achieving socially optimal incentives for innovation in public goods faces twin market failures: a market failure to adequately promote public goods invention and a market failure to implement innovative public goods once developed. Though innovation in private goods sometimes...