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the Suppes-Sen dominance relation is a weak and widely accepted criterion of distributive justice. We propose its application to Nash bargaining theory. The Nash Bargaining Solution (NBS) is characterised by replacing the controversial Independence of Irrelevant Alternatives axiom with an axiom embodying the Suppes-Sen principle. More precisely, maximality… (More)
We analyze an abstract model of trading where N principals submit quantity-payment schedules that describe the contracts they offer to an agent, and the agent then chooses how much to trade with every principal. This represents a special class of common agency games with complete information. We study all the subgame perfect Nash equilibria of these games,… (More)
Two distinct theories of patents, the " reward theory " and the " contract theory, " are customarily adopted by the courts to justify the patent system. The reward theory maintains that the function of the patent system is to remunerate successful innovators so as to encourage R&D effort. In contrast, the contract theory holds that the function of the… (More)
We reconsider the relationship between competition and growth in a standard neo-Shumpeterian model with improvements in the quality of products. We focus on the case of non-drastic innovations, and we model the notion of lower competition by a switch from Bertrand to Cournot competition. Our main …nding is that when the size of innovations is su¢ciently… (More)
In the Tourist-Caronte case in Italy, the incumbent, Tourist-Caronte, reacted to entry by entrant Diano by starting to supply a " damaged good " in the sense theorized by Deneckere and McAfee in 1996. We argue that in principle this strategy can be predatory, but it can also be an innocent response to entry. Specifically, the strategy of damaging the good… (More)
We analyze optimal patent design when innovators can rely on secrecy to protect their innovations. Secrecy has no fixed term, but does not preclude accidental disclosure nor independent creation by others. We prove that under weak conditions it is socially preferable to increase patent life as much as is necessary to induce first inventors to patent.
This paper studies the optimal division of pro…t with complementary innovations. We identify circumstances in which the research should be conducted sequentially, targeting one innovation after another in a pre-speci…ed order, even if each innovation can be achieved independently of the others. We then consider the implementation of this sequential pattern… (More)