We consider innovation incentives in markets where final goods comprise two strictly complementary components, one of which is monopolized. We focus on the case in which the complementary component is competitively supplied, and in which innovation is important. We explore ways in which the...

We examine the effects of market structure and the internal organization of firms on equilibrium R&D projects. We compare a monopolist's choice of R&D portfolio to that of a welfare maximizer. We next show that Sah and Stiglitz's finding that the market portfolio of R&D is independent of the...

Pricing of Internet access has been characterized by two properties: Parties are directly billed only by the Internet service provider (ISP) through which they connect to the Internet. Pricing, moreover, is not contingent on the type of content being transmitted. These properties define a regime...