Tension between efficiency and equity is fundamental to every economy. Historical differences between groups translate into inequality in skills and hence earnings. Measures to correct inequalities affect incentives and misallocate talent, therefore compromising efficiency. This paper examines...

We examine how trade liberalization affects South's incentive to protect intellectual property rights (IPR) in a North-South duopoly model where a low-cost North firm competes with a high-cost South firm in the South market. The extent of effective cost difference between North and South depends...

When firms form an alliance, it often involves one firm acquiring an equity stake in its alliance partner. Such an alliance weakens competition, but induces knowledge transfer between partner firms. We explore oligopoly models that capture the link between knowledge transfer and partial equity...

Does competitive pressure foster innovation? Technical progress consists of numerous small improvements made upon the existing technology continuous improvement and innovative activities aiming at entirely new technology (discrete innovation). Continuous improvement is often of limited relevance...

The importance of infrastructure for growth is well established in the macroeconomic literature. Previous research has treated public investment in infrastructure as exogenous. We remedy this shortcoming by providing a political economy analysis of infrastructure choice based upon consumer...

Platform sharing across manufacturers has recently become common practice in the automobile industry. Its important objective is to reduce procurement costs by taking advantage of the commonality of components, but this often reduces the degree of product differentiation. We investigate this...

We offer a new perspective on social efficiency of free entry through analyzing a successive vertical oligopoly model that explicitly incorporates vertical relationships between industries. We demonstrate that free entry in an industry that produces a homogeneous product can lead to a socially...

Books reviewed: Quantifying the Impact of Technical Barriers to Trade: Can It Be Done? Keith Maskus and John Wilson, (eds) Ann Arbor: University of Michigan Press. Too Sensational: On the Choice of Exchange Rate Regimes, by W. Max Corden, Cambridge, MA: MIT Press

Does competitive pressure foster innovation? In addressing this important question, prior studies ignored a distinction between discrete innovation aiming at entirely new technology and continuous improvement consisting of numerous incremental improvements and modifications made upon the...