Strategic Concealment in Innovation Races

with [Yonggyun (YG) Kim](https://sites.google.com/view/yonggyun-yg-kim/). Abstract. [Paper](https://www.dropbox.com/s/ct14h8o033hhjuv/SCIR_public.pdf?dl=0) We investigate a firm's incentives to conceal an intermediate research discovery in order to influence its rival's choice of strategy in an innovation race. To study this, we introduce an innovation game where two firms dynamically allocate their resources between two distinct research and development (R&D) paths towards a final innovation: (i) developing it with the currently available but slower technology; (ii) conducting research to discover a faster new technology for developing it. We fully characterize the equilibrium behavior of the firms in the cases where their research progress is public and private information. Then, we extend the private information setting by allowing firms to conceal or license their intermediate discoveries. We show that when the reward of winning the race is high, firms sometimes conceal their interim discoveries, which inefficiently retards the pace of innovation.

A Taxation Principle with Non-Contractible Events

with [Bruno Strulovici](https://faculty.wcas.northwestern.edu/~bhs675/) Abstract. [Paper](https://www.franciscopoggi.com/files/taxation.pdf). In some legal settings it is not possible to contract with an agent ex ante. For example, a criminal process only starts after the crime was committed and only if the agent is apprehended. We study a quasilinear single-agent setting with private information and private actions in which the intervention of the designer is only triggered by certain outcomes. We introduce a property of social choice functions, *identifiability*, and show that implementable social choice functions satisfying this property can be implemented with a *tariff*, that is transfers that depend only on the realized outcome.

Liability Design with Information Acquisition

with [Bruno Strulovici](https://faculty.wcas.northwestern.edu/~bhs675/) Abstract. [Paper](https://www.franciscopoggi.com/files/liability.pdf) How to guarantee that firms perform due diligence before launching potentially dangerous products? We study the design of liability rules when (i) limited liability prevents firms from internalizing the full damage they may cause, (ii) penalties are paid only if damage occurs, regardless of the product's inherent riskiness, (iii) firms have private information about their products' riskiness before performing due diligence. We show that (i) any liability mechanism can be implemented by a *tariff* that depends only on the evidence acquired by the firm if a damage occurs, not on any initial report by the firm about its private information, (ii) firms that assign a higher prior to product riskiness always perform more due diligence but less than is socially optimal, and (iii) under a simple and intuitive condition, any type-specific launch thresholds can be implemented by a monotonic tariff.