This paper studies how the existence of a potential entrant influences an incumbent’s choice of quality in a model of vertical product differentiation and entry. Both firms face fixed set-up costs and quality-dependent costs of production, and compete on quality and price. With identical...

Frequently, aspiring entrants have only limited information about their potential rivals’ entry decisions. As a result, the outcome of the entry game may be that more firms enter than the market can sustain; or, at least, that unnecessary entry investments are made. We refer to these outcomes...

This paper presents a simple model for analysing the contribution of investments in physical and institutional infrastructure to the transition process. In addition to the direct cost savings, infrastructure investment generates important indirect effects, or transition impacts. The model shows...

The decision of how best to appropriate the value of new economic knowledge is reached by individuals within the context of the decision-making process embedded in the principal-agent model and applied to organizations. Because new economic knowledge is not only imperfect but also inherently...