Research

DESCRIPTION
My current research focuses on the dynamics of innovation, models of entry, and competition policy.  I have, however, a broad interest in Microeconomic Theory, Industrial Organization, and Applied Theory.

PAPERS UNDER SUBMISSION
[1] Sequential Innovation and Patent Policy [pdf] (draft: February 2017)
     Briefing: In a world that inventions build upon each other, patents that protect inventors for too long, or grant too much forward protection are detrimental to the economy’s innovation rate. In other words, this paper challenges the view that the cost associated with strong patent policy is only the loss in consumer surplus associated with the monopoly that the patent grants.

[2] Mergers in Innovative Industries: The Role of Product Market Competition [with Guillermo Marshall] [pdf] (draft: May 2017)
     Briefing: We study how changes competition in the product market affects innovation outcomes. We give sufficient conditions when rejecting a merger using static guidelines implies rejecting it using dynamic criteria. We also provide sufficient conditions, based on static market measures, for a merger to improve welfare in a dynamic sense.

WORKING PAPERS
[1] Entry Games Under Private Information [with José Espín-Sanchez](Draft will be public by Sept 2017, please email for current version) 
     Briefing: We study firm entry decisions under private information and allowing general forms of market competition and heterogeneity among firms. We rank firms according to their capacity to endure competition, or strength,  and show that an equilibrium where players’ strategies are consistent with this ranking, or herculean equilibrium, always exists. When profits are elastic enough with respect to the firm’s private information, the herculean equilibrium is the unique equilibrium of the entry game.

[2] Announcing High Prices to Deter Innovation [with Guillermo Marshall]  (Draft will be public by Sept 2017, please email for current version) 
    Briefing: Price announcements—similar to the ones made in media events by tech firms—are effective in deterring the rival innovation. They increase the rivals’ short-run profits, generating a complacency effect that reduces the rival’s incentives to innovate.

[3] Second Price Auction with Entry Costs [with José Espín-Sanchez](New draft expected by Sept 2017) [pdf]
     Briefing: We characterize equilibrium in a completely asymmetric second price auction with entry cost. We provide general existence result, characterize uniqueness of equilibrium and discuss welfare.

[4] Mergers in Innovative Industries: A Dynamic Framework [with Guillermo Marshall] [pdf]
     Briefing: We investigate how a merger with R&D efficiencies affects market outcomes over time. To this end, we propose a dynamic framework based on a patent race model of sequential innovations with endogenous market structure. We show that timely (but costly) entry into the patent race is sufficient to guarantee that mergers are welfare improving. These results hold for all efficiency levels and despite the fact that mergers may reduce the number of firms performing R&D by more than one.

WORK IN PROGRESS
[1] Spillovers in Patent Races
     Briefing: Depending on market conditions, spillovers may not benefit firms racing for an innovation. In some markets, firms will try to avoid spillovers and in others foster them.

[2] When to License Sequential Inventions
     Briefing: Patent policy and market conditions not only affect the decision of whether to grant a license. They also affect when, throughout the patent life, a license will be granted.