Using a game theoretical model on firms' simultaneous investments in product and process innovation, we deduct and empirically test hypotheses on the optimal R&D portfolio, investment, performance, and dynamic efficiency of R&D for acquisitions and in independently competing firms. We use...

Prominent results of the property rights approach based on incomplete contracts as outlined by Hart (1995) say that all ownership structures lead to underinvestment and that joint ownership cannot be optimal, provided that investments are strategic complements and affect human capital only. We...

Firms' incentives to form RJVs are analyzed in an incomplete information framework when technological know-how is private information. Firms first decide on cooperation and then compete for a patent in a second price auction. Provided that firms have to indicate their willingness to cooperate by...

We explore the dynamic evolution of property rights regimes in R&D alliances using the incomplete contract approach pioneered by Grossman, Hart and Moore. In contrast to the standard analysis, the productive asset is an excludable public good such as a patent. Moreover, both firms can decide...

We develop a model of social preferences for network games and study its predictions in a local public goods game with multiple equilibria. The key feature is that players' social preferences are heterogeneous. This gives room for disagreement between players about the "right" payoff ordering....

Humans do not have infinite attention. Contrary to what traditional economic models would predict, only a subset of all available alternatives is considered for most decisions one makes in a lifetime. On top of this, only a limited number of attributes of these alternatives are taken into...

We analyze vertical relationships between a manufacturer and competing retailers when consumers have reference-dependent preferences. Consumers adopt the manufacturer’s suggested retail price as their reference price and perceive losses when purchasing above the suggested price and gains when...