Auctions, normally considered as devices facilitating trade, also provide a way to probe mechanisms governing one's valuation of some good or action. One of the most intriguing phenomena in auction behavior is the winner's curse --- the strong tendency of participants to bid more than rational...

December 1997 <p> This paper has been revised as Stanford Economics Working Paper 99-009.

We argue that when innovation is sequential (so that each successive invention builds in an essential way on its predecessors) and complementary (so that each potential innovator takes a different research line), patent protection is not as useful for encouraging innovation as in a static...

I was born in New York City, but grew up across the Hudson River in Alpine, New Jersey. With fewer than a thousand residents, Alpine was too small to have its own secondary schools, so I attended junior high and high school in the town of Tenafly, three miles down the road.

The authors study repeated games in which players observe a public outcome that imperfectly signals the actions played. They provide conditions guaranteeing that any feasible, individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with...