I model an innovation game in which firms can choose to be leaders or followers. Internal finance leads to a stalemate in which each firm wants to free-ride on the others' experimentation costs. Therefore, no innovation occurs. When instead firms compete in the capital markets to finance...

This essay studies the optimal timing for a firm to adopt a new process innovation in the presence of learning. A policy that has been implemented by governments throughout the world to reduce the cost level of infant industries with positive externalities, is to either subsidize the research of...

We study the potential of cooperation in global emission abatements with multiple externalities. Using a two-country model without side-payments, we identify the strategic effects under different timing regimes of cooperation. We obtain a positive complementarity effect of long-term cooperation...