The paper explores the role of R&D investments reducing fixed production costs in entry deterrence. An incumbent monopolist and a potential entrant can perform R&D to reduce their fixed production costs, with bidirectional and asymmetric technological spillovers. It is shown that deterrence,...

This article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry. We give sufficient conditions on consumer preferences that lead to Pareto-improving vertical integration and...

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...