This paper analyzes selection biases in the project choice of complementary technologies that are used in combination to produce a final product. In the presence of complementary technologies, patents allow innovating firms to hold up rivals who succeed in developing other system components....

This article develops an incomplete contract model of the licensing relationship to analyze the dynamic effects of licensing on R&D competition in the innovation market and to examine the rationale for often observed 'grant-back' clauses. Of particular concern are how the consideration of future...

This paper develops a simple model to analyze the effects of mergers in complementary system markets when the merged firm is able to engage in bundling. In the short-run analysis, I analyze the impact of (mixed) bundling on pricing decisions for existing generations of products. The basic model...

Platform-run marketplaces may exploit third-party sellers' data to develop competing products, but potential for future competition can deter sellers' enrty. We explore how this trade-off affects the platform's referral fee and its own entry decision. We first characterize the platform's optimal...

We investigate situations in which players make costly contributions as group members in a group conflict, and at the same time engage in contest with fellow group members to appropriate the possible reward. We introduce within group power asymmetry and complementarity in members' efforts, and...

This paper develops an incomplete contract model of the licensing relationship that is susceptible to the moral hazard problem. The optimal contractual form of licensing derived in the model generates predictions that seem to be consistent with actual practice. For instance, the introduction of...

Tying arrangements recently have been a major and contentious issue in many high profile antitrust cases in the US and Europe. Examples include the Microsoft case, the Visa and MasterCard case, and the proposed GE/Honeywell merger to name a few. This paper conducts a selective review of the...

Most patent pools are formed in the shadow of patent litigation as an attempt to settle disputes in regard to conflicting infringement claims and the validity of patents. To reflect this reality, I develop a simple framework to analyze the incentives to form a patent pool or engage in...

This paper provides a new perspective on the validity of the so-called 'leverage theory.' In a model of preemptive innovation in 'systems' markets, I examine the effect of bundling on R&D incentives. I find that bundling provides a channel through which monopoly 'slack' in one component market...