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I develop a model of an R&D race with knowledge accumulation. My model does not inherit the memorylessness property of the exponential distribution that troubles existing models of R&D races. Hence, firms' knowledge stocks are no longer irrelevant to their behavior during the R&D race, and knowledge accumulation has strategic implications. In this more(More)
In this paper, we show that substantial differences exists among U.S. small businesses owners with respect to their ex-ante expectations of future performance, their ex-ante desire for future growth, and their initial motives for starting a business. Specifically, using new data that samples early stage entrepreneurs just prior to business start up, we show(More)
We present models by which flexibility for a manufacturing system can be assessed. Two of the most fundamental types of flexibility, routing and machine flexibility, are examined. These models enable a manager to compare different system designs. Furthermore, our measures provide a manager with a tool to evaluate the ongoing operations of a system over time(More)
Joint production between rival firms often entails knowledge transfers without direct compensation, leaving the question as to why more efficient firms would give their rivals such an advantage. We find that such transfers are credible mechanisms to make the market more competitive so as to deter entry or force exit. We determine that with free entry such(More)
In this paper, we compare an n-firm Cournot game with a Stackelberg model, where n-firms choose outputs sequentially, in a stochastic demand environment with private information. The Stackelberg perfect revealing equilibrium expected output and total surplus are lower while expected price and total profits are higher than the Cournot equilibrium ones(More)
We examine horizontal merger activity between firms which have differing costs. Upon merging owners can transfer technology to an acquired firm and can decide whether to operate their firms as separate entities in the product market or consolidate their acquisitions. Thus, in our analysis, mergers can exhibit both an efficiency effect and a market power(More)
When a seller negotiates with multiple buyers, how does over-confidence affect the timing of trade? In this paper we distinguish between over-confidence about trade opportunities and over-confidence about the terms of trade. In bargaining environments without exter-nalities both types of over-confidence can cause delays in agreement. If externalities are(More)
This study examines a procurement auction involving one buyer and many sellers with different costs. We determine the conditions under which a buyer would opt for a two-stage auction where in the first round some sellers are eliminated. The rationale for such a multistage auction is that the buyer can eliminate outliers in the cost distribution, thereby(More)
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