incumbent and an entrant. We develop a model where cash-constrained firms finance their R&D expenditures with an investor who … cannot verify their effort. In equilibrium, the incumbent faces better prospects of winning the race the less cash … probabilities on measures of the incumbent's and potential entrants' financial wealth. The empirical findings support our …

an 'incumbent bidder' that owns a complement or substitute. With an auction on the transfer (i.e. payment) to the … government, the incumbent is advantaged.If the government regulates the market with an auction on the price asked to consumers …, it depends who is advantaged. With complements, the incumbent is advantaged: it can set a lower price on the new …