intervention, affecting the expected profitability of innovation, may both thwart the incentives to undertake research (average … deterrence) and guide the use to which innovation is put (marginal deterrence). We show that public intervention should become … a lenient authorization regime, and finally to a strict one. In contrast, absent innovative activity, regulation should …

undertake research by reducing its expected profitability (average deterrence) and may guide the use of innovation (marginal … deterrence). We compare four policy regimes: laissez faire, ex-post penalties and two forms of authorization – lenient and strict …. If fines are unbounded, laissez faire is optimal if the social harm from innovation is sufficiently unlikely; otherwise …

authorization and strict authorization. We find that corruption plays a critical role in the choice of the authorization regime …. Corruption exacerbates the costs of using lenient authorization, under which production of socially harmful goods is always … authorized. In contrast, corruption can be socially beneficial under strict authorization, since it can mitigate an over …

authorization and strict authorization. We find that corruption plays a critical role in the choice of the authorization regime …. Corruption exacerbates the costs of using lenient authorization, under which production of socially harmful goods is always … authorized. In contrast, corruption can be socially beneficial under strict authorization, since it can mitigate an over …

innovation, and an enforcer that sets legal standards, fines and accuracy. In this setting deterrence on actions interacts with …

of the investment process. Public policies may take different forms: the release of an authorization; the setting of … requires intervention. Our general result suggests that public policies should be softer when innovation is an important source …

innovation, and an enforcer that sets legal standards, fines and accuracy. In this setting deterrence on actions interacts with …

of the investment process. Public policies may take different forms: the release of an authorization; the setting of … requires intervention. Our general result suggests that public policies should be softer when innovation is an important source …