dirty innovation and production; (ii) optimal policy involves both .carbon taxes. and research subsidies, so that excessive … the switch to clean innovation under laissez-faire when the two inputs are substitutes. Under reasonable parameter values …

externalities. We show that the hold-up problem, which occurs if non-verifiable investments have external effects and parties cannot …

option of selling to an incumbent increases innovation incentives for entrepreneurs when network effects are strong and … necessarily restrict innovation incentives. We also show that network effects promote acquisitions over entry and that the … entrepreneur has strong incentives to invest in the initial user base of the innovation. …

favourable for innovation incentives. This is consistent with empirical evidence, suggesting that countries with a more equal …

technical and a pecuniary externality resulting from the innovation process may generate multiple equilibria. Redistribution may …