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We develop a multistage game in which firms do cumulative research and development (R&D) to complete a lengthy process, and we study whether firms patent intermediate results or release them in Open Source. A patent holder obtains a larger reward in the market, but since in equilibrium it forecloses R&D, it remains alone to complete the process and so pays a larger cost than an Open Source firm. We have Open Source equilibria when R&D is highly complementary, R&D costs are large, and firms are sufficiently different and far from the frontier. We identify two market failures, in the forms of free riding and coordination failure, and we discuss public intervention. 3 Our prediction is broadly consistent with historical evidence. Bessen and Nuvolari (2014) provide examples from the eighteenth century, like, the Bessemer steel, the steam engineers in the Cornish mining district, and the first two decades of power weaving in the US textile industry.

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In this article, we study the effect of the Unification on the network power of economic elites in the South of Italy. We study the persistence of economic elites as evidence of the stability of the institutional set up beyond the effect of Unification, and thus as a primary explaining factor of the persistence of social forces slowing and opposing modernization. We use original archival data on the universe of Naples enterprises to build the networks of business relations between individual economic actors for the 20-year period immediately before and after Unification. The persistence of network power and its determinants is tested via a difference-in-difference model. The main finding is that economic elites persist over Unification. The long-term business relations, rooted in the Bourbon period, the persisting lobbying power of the financial industry, the close collusive ties with potential foreign competitors and the closeness to politics after 1861 are all elements that explain how the Southern economic elites were able to crowd-out the change.

What kind of candidate is selected into a job when the principal has to appoint a committee to measure the candidate's ability and select a winner through a call specifying a wage for the job? In a model where the principal xes the wage anticipating the committee's choice, under a rather natural assumption about the committee's objective we nd that if the committee takes into account the candidate's gratitude a candidate with less than rst best ability will be selected in equilibrium. First best selection is achieved if the committee is anonymous to the candidates. If the committee could also set the wage the rst best candidate would be selected, but the principal would be worse o hence he would not implement full delegation.