In this paper we study a one-shot game of R&D between two price-setting firms that are asymmetrically placed as they produce at different cost levels. First we prove the existence and the properties of a noncooperative equilibrium. Then, we show that the higher (lower) the discount rate, the...

In this paper we study a one-shot game of R&D between two price-setting firms that are asymmetrically placed as they produce at different cost levels. The R&D technology displays increasing returns in the form of invisibilities. We show that there exists a unique equilibrium in pure strategies,...

This paper analyses some monetary policy issues in a model of business cycle derived from Lucas (1972). We show that an autoregressive monetary policy rule may dominate a k-percent rule, and that the optimal monetary policy is characterised by an infinite amount of noise.

The main purpose of this paper is to show that the Cambridge Theorem holds independently of Ricardian Equivalence, if the net rate of profits is properly defined.

Arrow's Impossibility Theorem is concerned with the problem of finding a collective choice rule which selects one or more alternatives from every non emplty subset of the universal set of alternatives.

We model a duopoly with a private and a public firm under the hypothesis of vertical product differentiation. Firms choose their quality levels first and then prices. We ask which firm will choose to serve the higher (lower) segment of the market. When firms act simultaneously in each stage,...

Without spillovers and under the "winner-take-all" hypothesis, there is overinvestment in R&D in a non cooperative equilibrium. This is due to the so-called "common pool problem", i.e., duplication of efforts. We show that a public firm can represent a useful instrument in the hands of a...

The problem of extending an ordering on a set of alternatives to its power set is analysed. Kannai and Peleg (1984) and Barberà and Pattanaik (1984) have shown that no extention rule satisfies certain reasinable conditions. This paper prove a new impossibility results, using a condition, called...

This paper studies the optimal lifetime of a patent in a model where the timing of innovatons: is uncertain. We assume a Poisson discovery process with a linear hazard function and contractural R&D costs. The invention industry is modelled in three alternative ways: i) monopoly; ii) oligopoly...

We study the differences in the impact of trade restrictions on the level of imports (e.g. 200,000 automobiles per years) and restrictions defined in terms of market shares (e.g. 10% of the market). We argue that if domestic firms enjoy some market power proportional trade restrictions have a...