We develop a theory of exclusive dealing that rehabilitates pre-Chicago-school analyses. Our theory rests on two realistic assumptions: that firms are imperfectly informed about demand, and that a dominant firm has a competitive advantage over its rivals. Under those assumptions, exclusive...

We study optimal patent design, contrasting the case that two or more innovations are needed to operate a new technology with the traditional case that a single innovation is directly commercialisable. The major finding is that with complementary innovations the patentability requirements should...

type="main" <p>We analyze the optimal division of profit with complementary innovations. Even if each innovation can be achieved independently of the others, we identify circumstances in which the research should be conducted sequentially, targeting one innovation after another in a prespecified...</p>