We analyze the effect of liquidated damage rules in exclusive contracts that are negotiated in a sequential bargaining process with endogenous outside options. Assumptions on the distribution of bargaining power influence damage payments and determine which contractual party benefits from...

Using a game theoretical model on firms' simultaneous investments in product and process innovation, we deduct and empirically test hypotheses on the optimal R&D portfolio, investment, performance, and dynamic efficiency of R&D for acquisitions and in independently competing firms. We use...

Do potential entrepreneurs exploit welfare-destroying opportunities as much as they exploit welfare-enhancing opportunities as it is assumed in several normative models? Do we need to prevent potential entrepreneurs from being destructive or are there intrinsic limits to harm others? We...

The explosion in online social networks motivates an enquiry into their structure and their welfare effects. A central feature of these networks is information sharing: online social networks lower the cost of getting information from others. These lower costs affect the attractiveness of...