Worst-Case Bounds on R&D and Pricing Distortions: Theory with an Application Assuming Consumer Values Follow the World Income Distribution
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The authors thank Dan Bjorkegren, Severin Borenstein, Eric Edmonds, James Feyrer, Berhnard Ganglmair, Jerry Green, Douglas Irwin, Sonia Jaffe, Justin Johnson, Anup Malani, Scott Pauls, Nina Pavcnik, Robert Staiger, Michael Waldman, Glen Weyl, Jonathan Zinman, and seminar participants at Cornell University, Duesseldorf Institute for Competition Economics, Indiana University, the Advances in Price Theory Workshop at the Becker-Friedman Institute, and the International Industrial Organization Conference at Drexel University for insightful comments. The authors are grateful to Maxim Pinkovskiy and Xavier Sala-i-Martin for sharing the data behind their estimates of the world distribution of income used in our calibrations and for detailed advice on constructing these and alternative distributions. The authors thank Branco Milanovic for use of the Lakner-Milanovic (2015) data, publicly posted on the CUNY Graduate Center website. The authors thank Matthew Goodkin-Gold for excellent research assistance. Snyder gratefully acknowledges the support and hospitality of the Becker-Friedman Institute at the University of Chicago where he was a visiting scholar while undertaking some of this research. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.