This article provides a theoretical and empirical analysis of a …rm's optimal R&D strategy choice. In this paper a …rm's R&D strategy is assumed to be endogenous and allowed to depend on both internal …rms' characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. In the theoretical model this yields three types of equilibria in which either all …rms innovate, some …rms innovate and others imitate, or no …rm innovates. Firms'equilibrium strategies crucially depend on external factors. We …nd that the e¢ ciency of intellectual property rights protection positively a¤ects …rms'incentives to engage in R&D, while competitive pressure has a negative e¤ect. In addition, smaller …rms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. These results are supported by empirical evidence for German …rms from manufacturing and services sectors.Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous e¤ect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account speci…c market and …rm characteristics.Journal of Economic Literature Classi…cation Numbers: C35, D43, L13, L22, O31.

We document a causal impact of online user-generated information on realworld economic outcomes. In particular, we conduct a randomized field experiment to test whether additional content on Wikipedia pages about cities affects tourists' choices of overnight visits. Our treatment of adding information to Wikipedia increases overnight stays in treated cities compared to nontreated cities. The impact is largely driven by improvements to shorter and relatively incomplete pages on Wikipedia. Our findings highlight the value of digital public goods for informing individual choices. | INTRODUCTIONAsymmetric information can hinder efficient economic activity (Akerlof, 1970). In recent decades, the Internet and new media have enabled greater access to information than ever before. However, the digital divide, language barriers, Internet censorship, and technological constraints still create inequalities in the amount of accessible information (see

Online labor markets experienced a rapid growth in recent years. They allow for long-distance transactions and offer workers access to a potentially 'global' pool of labor demand. As such, they bear the potential to act as a substitute for shrinking local income opportunities. Using detailed U.S. data from a large online labor platform for microtasks, we study how local unemployment affects participation and work intensity online. We find that, at the extensive margin, an increase in commuting zone level unemployment is associated with more individuals joining the platform and becoming active in fulfilling tasks. At the intensive margin, our results show that with higher unemployment rates, online labor supply becomes more elastic. These results are driven by a decrease of the reservation wage during standard working hours. Finally, the effects are transient and do not translate to a permanent increase in platform participation by incumbent users. Our findings highlight that many workers consider online labor markets as a substitute to offline work for generating income, especially in periods of low local labor demand. However, the evidence also suggests that, despite their potential to attract workers, online markets for microtasks are currently not viable as a long run alternative for most workers.

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Economic crises have a harmful effect on employment. However, whereas the resulting loss of jobs has been shown to have many negative consequences for the affected individuals, it may also push them into new activities, such as provision of service to their communities. In this paper, we show how individuals engage in socially useful activities after an increase in unemployment. Specifically, we document increased online content generation at Wikipedia, the world’s largest user-generated knowledge repository. Leveraging German district-level and European country-level unemployment data, we analyze the relationship between the economic crisis in 2008–2010 and contributions to Wikipedia. We find increased socially valuable activity in the form of knowledge acquisition and contributions to Wikipedia. For German districts, we observe an increase in the rate of content generation on Wikipedia in more severely affected districts. These effects are even stronger at the European country level. Our findings suggest that public goods provision increases as a positive side effect of economic crises. We stress that similar patterns could apply to other digital content platforms. Under the backdrop that the potential value of the outcome of online volunteering and its societal impact is expected to grow drastically in the next years, we show that platforms could benefit from negative economic conditions in attracting volunteers. Moreover, in the coming years, the rapid development of artificial intelligence will call for a rise of online volunteering platforms. Therefore, the potential value of the outcome of online volunteering and its societal impact is expected to grow drastically in the next years.