We analyze innovative activity in a general framework with time-dependent rewards and sunk costs. When firms are identical, innovation is delayed by an increase in the number of firms or a decrease in the size of the reward. When one firm has higher profit potential, it is more likely to innovate first. Our framework generalizes an all-pay auction; however, we show that under certain conditions...

When effort is multi-dimensional, firms will optimally “balance” the provision of incentives. Setting high-powered incentives along one dimension raises the returns to providing high-powered incentives along other dimensions which compete for the worker’s effort and/or attention (Holmstrom and Milgrom, 1991). We test for this effect in the context of for-profit pharmaceutical laboratories using...

I analyze the welfare implications of protecting intellectual property rights (IPRs) in developing countries through its impact on innovation, market structure, and technology transfer. FDI, tariffs, and cooperation are introduced to the strategic IPR literature. In a North-South framework, the Southern government sets the IPR policy strategically by anticipating the Northern firm’s decision on...

The a-subunit is common to the family of heterodimeric glycoprotein hormones FSH, LH, TSH and the placerual chorionic gonadotropin (CG). Clones coding for the pre a-subunit of the pituitary glycoprotein hormones were isolated from a lamb pituitary XgtlO cDNA library [1] using a synthetic oligonucleotide probe based on the published amino acid sequence of the ovine a-subunit [2] and nucleotide s...

We study university projects and research collaboration projects with industry that are supported by government grants. First, we propose a theoretical model to analyze optimal decisions in these ventures. Second, we test our theoretical results with a unique dataset containing academic publications and collaborative research funds for all the academics at the major engineering departments in t...

Both climate change and technical change are uncertain. In this paper we show the importance of including both uncertainties when modeling for policy analysis. We then develop an approach for incorporating uncertainty of technical change into climate change policy analysis. We define and demonstrate a protocol for bottom-up expert assessments about prospects for technologies. We then describe a...

This paper considers the effect of different firm leadership on the innovative performance of firms from seven EU countries. We investigate whether owner-led or manager-led firms achieve a larger share of their turnover with product innovations. Economic theory does not propose clear answers to this question. In the empirical analysis, it turns out that the manager-led firms are more active inn...

This paper investigates the decision of an automaker concerning the alternative promotion of a hybrid vehicle (HV) and a full electric vehicle (EV). We evaluate the HV project by considering the option to change promotion from the HV to the EV in the future. The results not only extend previous findings concerning American options on multiple assets, but also include several new implications. O...

We examine the impact of a large number of Japanese government-sponsored research consortia on the research productivity of participating firms by measuring their patenting in the targeted technologies before, during, and after participation. Consistent with the predictions of the theoretical literature on research consortia, we find consortium outcomes are positively associated with the level ...