The dissertation discusses issues in the field of industrial organization. When the government provides better infrastructure to competing firms for innovation, private firms' R&D expenditures are affected. When the government doesn't assure project completion, the uncertainty impacts private firms' R&D expenditures. Two cases are discussed: non-drastic and drastic innovation. The second chapter explores the overemphasis of homeruns in baseball. In theory, if homeruns are overemphasized, uncertainty of total base is increased. Empirically, the opportunity costs behind a triple and a double, and the dominance of a double over a triple verify this overemphasis theory.

The third chapter concentrates on the trade policies for an oligopoly market. Subsidy policy converges to direct quantity control. The government reallocates any subsidy for infrastructure to maximize the discounted social benefit for infinite horizon. In this process, the market uncertainty is reduced, and subsidy also converges to direct quantity control.