This discussion paper resulted in a publication in the <I>Journal of Economic Dynamics and Control</I> (2013), 37(12), 2729-2754.<P> Existing models of R&D are not easily reconciled with four observable aspects of R&D: initial technologies ('ideas') need to be developed further, only a minority of initial...</p></i>

Existing models of R&D are not easily reconciled with four observable aspects of R&D: initial technologies (ideas) need to be developed further, only a minority of initial ideas are successfully brought to the market, production and process innovations take place simultaneously (whereby,...

We investigate the optimal R&D portfolio of a single-product monopolist investing in cost-reducing activities accompanied by efforts improving the quality of its product. There emerges that the firm's relative incentives along the two directions are conditional upon market affluency, measured by...

I investigate a simple model of advance-purchase contracts as a mode of financing costly projects. An entrepreneur has to meet some capital requirement in order to start production and sell the related good to a limited number of potential buyers who are privately informed about their...

I investigate a simple model of advance-purchase contracts as a mode of financing costly projects. The analysis can easily be reinterpreted as a model of the monopolistic provision of excludable public goods under private information. An entrepreneur has to meet some capital requirement in order...

When an improvable durable good (such as packaged software) saturates the market, the seller could be tempted to release new versions too frequently, hurting her profit. A novel contractual device, which we term as a Free New Version Rights warranty (Free NVR warranty), can help the seller...

An indivisible good is an ideal type with interesting properties and strong implications about public policy. It is a good - such as a heart transplant or a treatment for AIDS - that must be consumed in a fixed amount or not at all. The community's demand curve for an indivisible good is a...