This paper analyzes innovation adoption when uncertainty about its profitability cannot be resolved immediately. Firms begin with a common estimate of the probability of high demand. If any adopts, all observe realized demand. An increase in the initial estimate can decrease the equilibrium...

Biological invasions are classical examples of externalities. The risks and damages from biological invasions are endogenous, depending on how society protects itself from invasions, and how it reacts to them after they occur. This paper analyzes a dynamic model in which society can undertake a...