The authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post-development dissemination of the innovation, such as licensing or imitation. This dissemination may cause the noninnovating firm to benefit from the discovery. When this occurs,...

The author examines third-degree price discrimination by an upstream monopolist in an intermediate good market. Discrimination is motivated by the fact that downstream firms differ in their abilities to integrate backward into supply of the input. The author shows that under reasonable...

In markets where advantages, e.g., network ex ternalities, are significant, firms' product compatibility choices are an import ant determinant of industry performance. This paper compares the private and soc ial incentives to achieve compatibility in a two-period duopoly model with (poss ible...

The authors examine the effects of renegotiation in an agency relationship. They show how renegotiation affects (1) the set of actions the principal can induce the agent to take and (2) the cost of implementing a given action. The authors show that, when the principal receives an unverifiable...