Vincenzo Denicolò

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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 SuppesSen principle. More precisely, maximality(More)
We analyze optimal patent design when innovators can rely on secrecy to protect their innovations. Secrecy provides a temporary monopoly, which terminates when the secret leaks out or the innovation is duplicated. We find conditions under which the optimal policy is to induce the first innovator to patent. Furthermore, we derive the optimal scope of the(More)
An innovative firm with private information about its indivisible process innovation chooses strategically whether to apply for a patent with probabilistic validity or rely on secrecy. By doing so, the firm manages its rivals’ beliefs about the size of the innovation, and affects the incentives in the product market. A Cournot competitor tends to patent big(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 patent(More)
We present a theory of unilateral regulatory overcompliance as a signaling device. Firms that have a competitive advantage in the use of a cleaner but more costly technology overcomply in order to signal to an imperfectly informed, benevolent government that compliance costs are low, thereby triggering tougher regulation. We identify the conditions under(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)
We re-consider 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)