According to Nordhaus, the optimal life of a patent T* trades off the ``embarrassment" of monopoly with motivating innovation, given that imitators would otherwise copy inventions and, in competing with innovators, reduce their profit hence incentive to innovate. To test this argument, we...

In some recent merger cases the European Commission has relied on quantitative economic techniques in the competitive assessment of horizontal mergers. These techniques have ranged from the use of merger simulation models (for both differentiated and homogenous goods), to the deployment of...

We analyze the impact of a merger on firms’ incentives to innovate. We show that the merging parties always decrease their innovation efforts post-merger while the outsiders to the merger respond by increasing their effort. A merger tends to reduce overall innovation. Consumers are always...

This paper presents a principal-agent model of IMF conditional lending, in the aftermath of a "capital-account" liquidity crisis. We show that traditional ex-post conditonality can be effective in safeguarding the Fund's resources, allowing for the provision of efficient emergency lending and...