This paper introduces time inconsistent preferences into a moral hazard setting where the agent is risk-averse. We derive a necessary optimality condition on the consumption allocation that is different from the so-called Inverse Euler Equation of Rogerson (1985). Specifically, inverse marginal...

A model with constant marginal costs is considered where firms choose first a period for production and then the amount to produce when competing in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry output configurations...

A free entry model with linear costs is considered where firms first choose their entry time and then compete in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry outputconfigurations encompassing one limit-output dominant...

This paper examines a three-stage model of divisionalization where, first, two parent firms create independent units, second, the parent firms allocate cost reduction levels over these units, and third, the resulting units compete in a Cournotmarket given their current costs of production. The...

A duopoly model of cost reducing R&D-Cournot competition is extended to study the endogenous timing of R&D strategic investment. Under the assumption that R&D spillovers only flow from the R&D leader to the follower, sequential and simultaneous play at the R&D stage are compared, in order to...

In a linear model ofcost reducing R&D/Cournot competition, firm asymmetry is shown to be sustainable as subgame perfect Nash equilibrium with R&D competition only ifthe productivity of research is sufficiently large relative to the benefits from imitation. In such a case, industry-wide cost...

A duopoly model of cost reducing R&D-Cournot market competition is extended to encompass endogenous timing of R&D investments. Under the assumption that R&D spillovers are zero under simultaneous choices of R&D and only flow from the R&D leader to the follower under sequential choices,...

In a standard model of R&D followed by linear Cournot competition, firm asymmetry is sustainable as equilibrium with noncooperative R&D if and only if the productivity of research is sufficiently large relative to the benefits of imitation. Increasing spillovers distribute R&D results among...

This paper compares industry profit and R&D propensity for a duopoly conducting either noncooperative or cooperative R&D and a monopoly, using two different basic models of strategic R&D. One postulates spillovers in R&D inputs and predicts that equilibrium joint profit and R&D levels are always...