Economic theory has primarily viewed an innovation as a single, discontinuous change. Historical and empirical evidence, on the other hand, shows improvements to original technologies and quality additions to early products. We focus analysis on competition in post-discovery phase, emphasizing...

We study a class of two-player continuous time stochastic games in which agents can make (costly) discrete or discontinuous changes in the variables that affect their payoffs. It is shown that in these games there are Markov perfect equilibria of the two-sided (s,S) rule type. In such equilibria...

We use a model of real-time decentralized information processing to understand how constraints on human information processing affect the returns to scale of organizations. We identify three informational (dis)economies of scale: diversification of heterogeneous risks (positive), sharing of...