market structure and resource depletion a contribution to the theory of intertemporal monopolistic competition a the theory of resource extraction in the model we present there exists a produced substitute to the natural resource the primary question with which we are concerned is the interaction of the resource and its substitute the model we present can thus be thought as providing a link between rent and production based price theories one of the general results in the earlier literature on resource extraction is that deposits with lower extraction costs will be exploited first the analysis

resource pricing and technological innovations under oligopoly a theoretical exploration this article presents a non technical survey of some recent theoretical analyses of the pricing of exhaustible natural resources and the incentives for developing resource substitutes under oligopoly and looks in perspective at what appear to be the central considerations among the main conclusions that are presented are those that bear on the pace of r d activity the phenomenon of sleeping patents oligopolistic pricing before and after the resource substituting invention the timing of innovation and the transition from one resource base to another it concludes with an analysis of a national r d policy for a resource importing country

life cycle asset accumulation and allocation in canada this paper documents the life cycle patterns of household portfolios in canada and investigates several hypotheses about asset accumulation and allocation inferences are drawn from the 1999 survey of financial security with some comparisons to earlier wealth surveys from 1977 and 1984 i find cross sectional evidence for asset decumulation at older ages when annuitized assets like pension wealth are included in the analysis i also find that the portfolio share of financial assets increases sharply with age while indicators of risk tolerance appear to decrease this is consistent with families desiring more liquid and less risky assets as they age jel classification d31 e21 g11 le cycle de vie de l accumulation et de l allocation des actifs au canada ce memoire documente le cycle de vie des portefeuilles des menages au canada et examine plusieurs hypotheses quant a l allocation et l accumulation des actifs on developpe certaines inferences a partir de l enquete sur la securite financiere de 1999 ainsi qu a partir des enquetes sur la richesse de 1977 et 1984 certains resultats pointent vers une decumulation des actifs avec l avancement de l ge quand on prend en compte dans l analyse les actifs annualises comme les rentes il semble aussi que la portion des debentures augmente dramatiquement avec l ge et que les indicateurs de tolerance de risque paraissent diminuer voila qui s arrime bien a un desir d avoir des actifs plus liquides et moins risques a mesure qu on vieillit

cycles in natural resource commodity prices an analysis of the frequency domain abstract a model is derived that relates price cycles to investment behavior in the mineral industries and predicts that these cycles will be roughly twice as long as the investment period the period between the investment decision and the project completion spectral techniques are used to estimate the principal cycles in metal and fuel prices for the metals the estimated cycle lengths reinforce the model predictions however no significant cycles are found in the prices of the fuels the lead lag relationships between prices of different commodities are also investigated and are found to be significant for those that are jointly produced

disruption costs learning by doing and technology adoption abstract we study technology adoption in a dynamic model of price competition adoption involves disruption costs and learning by doing because of disruption costs the adopting firm begins in a market disadvantage which may persist if its rival captures the customers that the adopting firm needs to learn the technology the prospect of future rents by the rival results in i a failure to adopt socially efficient technologies ii an equilibrium preference for technologies that are learned faster but have lower social value and iii more technologies being adopted if more firms enter the market

competition or predation consumer coordination strategic pricing and price floors in network markets although network effects can make predation more likely to succeed we find that the leading anti predation rules may lower or raise efficiency and consumer welfare in network markets we find that a the extensive debates about the correct measure of cost on which to base price floors are unlikely to be productive b the ordover willig rule that is widely thought to be correct in theory but difficult to apply in practice is in fact incorrect in theory and c efficient price floors would have to depend on consumer expectations and coordination processes that are unlikely to be observable in practice

a model of the evolution of duopoly does the asymmetry between firms tend to increase or decrease this paper is an attempt to identify some of the factors that affect the evolution of market structure in a model of dynamic competition between two firms the stochastic evolution of the state of competition depends on the respective effort rates of the firms the question is whether the current leader works harder than the laggard does the gap between firms tend to increase or decrease we show that several effects are at work the state tends to evolve in the direction where joint payoffs are greater since joint payoffs are related to joint product market profits less joint effort costs there are two classes of effect the joint profit effect and various joint cost effects the latter result in part from the pattern of profits and in part from endpoint effects that give relief from efforts asymptotic expansions illuminate these influences moreover we show by numerical simulation that there is another kind of joint cost effect the pattern of joint effort costs can influence the pattern of evolution of market structure and the evolution of the pattern of market structure can influence the pattern of efforts in a mutually self reinforcing manner in particular there may be equilibria in which this last effect means that the laggard works harder than the leader even though all the other effects work in favour of the leader

entry and competitive dynamics in the mobile telecommunications market abstract we propose an extension of the gans stern gans j s stern s 2003 the product market and the market for ideas commercialization strategies for technology entrepreneurs research policy 32 2 333 350 framework that includes entry by existing firms an incumbent firm possessing complementary assets and strong appropriability is in a formidable position teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 6 285 305 however a de alio entrant can leverage complementary assets to enter along a new technological trajectory and then develop appropriability we illustrate how several mobile telecommunications firms ericsson nokia and samsung pursued this strategy to catch up with the market leader motorola we also identify several shortcomings in motorola s approach it was too inward looking in developing technologies but ironically not inward looking enough in exploiting its most valuable patents

when do auctions ensure the welfare maximizing allocation of scarce inputs we determine when an unfettered auction will ensure the welfare maximizing allocation of a scarce input that enhances product quality and may reduce production costs a supplier values the input for this use value and for its foreclosure value because once the input is acquired it is unavailable to rivals an unfettered auction often ensures the welfare maximizing allocation of an input increment however it can fail to do so when the input would increase relatively rapidly the competitive position of a rival with a moderate competitive disadvantage bidder handicapping that ensures auctions generate welfare maximizing input allocations differ from standard handicapping policies

strategic considerations in invention and innovation the case of natural resources strategic considerations may induce a resource importing country to invent a substitute earlier than it intends to put it to use there are also circumstances in which it would wish to delay an invention date even if it could obtain it at an earlier date at no extra cost similar paradoxical results obtain if resource cartels behave strategically setting prices high may be a way of deterring invention if those engaged in r d are not resource users and the cartel has access to similar r d technology it will pre empt rivals this may not be the case if resource users can also engage in r d

when do stronger patents increase continual innovation under continual innovation greater patent strength expands innovating firms profit against imitation but also shifts profit from current to past innovators we show how the impact of patents on innovation as determined by these two opposing effects varies with industry characteristics when the discount factor is sufficiently high the negative profit division effect is negligible and innovation monotonically increases in patent strength otherwise innovation has an inverted u relationship with patent strength and stronger patents are more likely to increase innovation when the discount factor or the fixed innovation cost is higher we also show how the impact of patents on innovation may change with firms innovation capability and with the intensity of competition from imitators

differential game models in management science abstract this paper reviews a number of differential games applications to management science and operations research problems published with a few exceptions during the last decade the purpose of the article is to provide the reader with an up to date account of the state of the art within this field after having stated in an introduction the general differential games framework as well as some conceptual problems we proceed to review the models which have been divided into the following functional areas investment consumption and employment production inventories and maintenance marketing advertising pricing and rd bargaining natural resources and pollution the survey concludes with some remarks on applicability solvability and directions for future research

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

market structure and resource extraction under uncertainty this paper compares the rate of extraction of a natural resource under alternative market structures when there is uncertainty about the date of discovery of a substitute or about the date of discovery of a new deposit the analysis shows that imperfectly competitive market structures are excessively conservationist for any value of the initial stock of the natural resource the price is higher than in competitive equilibrium and therefore higher than the socially optimal level but markets with limited competition may have a higher price than markets with pure monopoly the same monopolist controlling the natural resource and its substitute in particular we find that the highest prices are associated with nash quantity setting duopolists the next highest prices occur in markets in which the monopolist controls the resource but the substitute is competitively produced the pure monopolist sets his price lower than this while the market in which a monopolist controls the substitute but the resource is competitvely owned is still lower

choosing the competition and patent licensing this article examines licensing as a means of choosing the competitors which a patentee monopolist will face in the period after the patent expires the queue of entrants consists of two firms which differ in their relative strengths as competitors for example by size or level of marginal cost by structuring the industry to be composed of weak competitors the incumbent is able to prolong its dominant position in the industry after the patent expires examples are presented in which the evidence suggests that choosing the competition was an important motivation of the licensor s behavior

is it a car or a truck managerial beliefs the choice of product architecture and the emergence of the minivan market segment new markets segments are a common setting for studies in technology strategy these studies generally assume that new segments already exist or have formed following the introduction of a product innovation by an entering firm thus theory on the role of established firms in the emergence of new market segments is underdeveloped this study informs current research by explaining the product innovation decisions of established firms during the emergence of a new market segment the results of a case study on the development and commercialization of the minivan at chrysler ford and general motors between 1970 and 1985 indicate that existing theories based on managerial cognition firm capabilities economic incentives and organizational structure are insufficient to explain the decisions this article develops theory based on the interrelationship of these four mechanisms

innovation and the persistence of monopoly abstract the auction framework enables us to highlight a crucial feature of many r d races the losing firm can recoup part but not the entirety of its r d investments this feature is shown to account for the marked differences in results obtained by gilbert and newbery and by reinganum when the firm investing the largest amount wins with certainty we establish the existence of a unique equilibrium neither firm employs a pure strategy and the incumbent wins more often than the challenger

the costs of uncoordinated regulation patents encourage firms to undertake research and development by protecting innovator revenues from competition controls on pollution of the environment are intended to close the gap between the private and social costs of natural resource use this paper examines the incentives that are created by the interaction of these two separate pieces of regulation a model is developed that shows how an incumbent patent holding firm can take advantage of environmental regulation to exclude rivals from her market

an economic theory of planned obsolescence planned obsolescence is the production of goods with uneconomically short useful lives so that customers will have to make repeat purchases however rational customers will pay for only the present value of the future services of a product therefore profit maximization seemingly implies producing any given flow of services as cheaply as possible with production involving efficient useful lives this paper shows why this analysis is incomplete and therefore incorrect monopolists are shown to desire uneconomically short useful lives for their goods oligopolists have the monopolist s incentive for short lives as well as a second incentive that may either increase or decrease their chosen durability however oligopolists can generally gain by colluding to reduce durability and increase rentals relative to sales some evidence is presented that appears to be generally consistent with the predictions of the theory

extraction of a resource with a substitute for some of its uses important resources e g oil may be used for several purposes there may exist good substitutes for such a resource in some of its uses but no substitute in other uses the price and extraction paths for the resource are analysed for several market structures some of these paths differ substantially from the corresponding paths for the case of no substitute and for the case of a substitute for all the resource s uses in particular a jump in the resource price may occur l extraction d une ressource quand il existe un substitut pour certains des usages qu on peut en faire certaines ressources importantes comme 1 huile par exemple peuvent etre utilisees a plusieurs fins dans certains cas il se peut qu il existe des substituts pour certains usages qu on peut en faire alors que dans d autres cas il n existe pas de substituts l auteur examine la tarification et les diverse strategies d extraction dans des structure de marches differentes certaines de ces strategies d extraction different substantiellement de celles qui auraient ete utilisees soit dans le cas oiu aucun substitut n existe soit dans le cas ou substitut existe pour tous les usages qu on peut faire de la ressource en particulier on peut observer un saut dans le prix de la ressource

evidence for the role of energy resources in producing long waves in the united states economy abstract a hypothesis is proposed and tested concerning the existence of the following causal pathway some event such as a war creates a shortage of whichever resource is currently the most critical limit for a society that event drives up prices of that resource more than those of other resources or manufactured goods after a lag there is a shift of capital investment to industries that had the highest such price increase after a further lag there is an excessive ratio of supply to demand in industries which had that elevated capital investment and a price collapse in industries from which capital had been shifted shortages relative to long run trajectories drive up prices relative to wages these phenomena in combination cause layoffs then a depression the nation or nations in the world which have greatest internal strains produced by depression or serious recession then use an armaments buildup to stimulate their economies this sharply increases the likelihood of the next war and the cycle repeats the steps in this hypothesis are tested by determining the proportion of the variance in system variables that can be accounted for using nonlinear equations to describe growth and wavelike behavior of the united states since the mid nineteeth century parameters were estimated using the iterative matyas and simplex curve fitting algorithms

dynamic inducements in r d investment market signals and network locations this research shows that alliance networks shape how firms respond to uncertainty reducing information generated outside a network product awards signal the potential commercial success of the awa

mortality health status and wealth in this paper we use the two waves of the british retirement survey 1988 1989 and 1994 to quantify the relationship between socioeconomic status and health outcomes we find that even after conditioning on the initial health status wealth rankings are important determinants of mortality and the evolution of the health indicator in the survey for men aged 65 moving from the 40th percentile to the 60th percentile in the wealth distribution increases the probability of survival by between 1 0 and 1 9 percentage points depending on the measure of wealth used a similar effect is found for women of between 1 1 and 1 3 percentage points in the process of estimating these effects we control for nonrandom attrition from our sample

regulation innovation and the introduction of new telecommunications services i examine the effects of fcc regulation on the innovation and introduction of advanced telecommunications services in the united states an interim of lighter regulation provides an experiment to test the regulatory regime s impact the econometric model comprises an arrival process for service innovation followed by a duration process for regulatory delay the number of services the firms created during the interim is 60 99 higher than the model predicts they would have created if the stricter regulation had still been in place overall firms would have introduced 62 more services to consumers during the study period if the regulation had not been in place

differential mortality and wealth accumulation the issue of asset accumulation and decumulation is central to the life cycle theory of consumer behavior and to many policy questions one of the main implications of the life cycle model is that assets are decumulated in the last part of life most empirical studies in this area use cross sectional data of estimate mean or median wealth age profiles the use of cross sections to estimate the age profile of assets is full of pitfalls for example if wealth and mortality are related in that poorer individuals die younger one overestimates the last part of the wealth age profile when using cross sectional data because means or other measures of location are taken over a population which becomes richer as it ages this paper examines the effect of differential mortality on cross sectional estimates of wealth age profiles our approach is to quantify the dependence of mortality rates on wealth and use these estimates to correct wealth age profiles for sample selection due to differential mortality we estimate mortality rates as a function of wealth and age for a sample of married couples drawn from the survey of income and program participation sipp our results show that accounting for differential mortality produces wealth profiles with significantly more dissaving among the elderly

persistence of innovation in dutch manufacturing is it spurious this paper studies the persistence of innovation and the dynamics of innovation output in dutch manufacturing using firm data from three waves of the community innovation surveys cis pertaining to the periods 1994 1996 1996 1998 and 1998 2000 we estimate by maximum likelihood a dynamic panel data type 2 tobit model accounting for individual effects and handling the initial conditions problem we find that there is no evidence of true persistence in achieving technological product or process innovations while past shares of innovative sales condition albeit to a small extent current shares of innovative sales

public private mix of health expenditure a political economy and quantitative analysis this paper constructs a simple model to examine decisions on public and private health spending under majority voting in the model agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure the health status of an agent is determined by a ces composite of public and private health expenditure the existence and uniqueness of the voting equilibrium are established a quantitative exercise reveals the importance of the relative effectiveness of public and private health expenditure and their substitutability in determining the public private mix of health expenditure and in accounting for the observed differences across a sample of 22 advanced democratic countries

do the sick retire early chronic illness asset accumulation and early retirement our objective is to determine how chronic illness affects asset accumulation and retirement previous studies have found that poor health leads to early retirement but those studies failed to look at the indirect impact of chronic illness on retirement using data from the health and retirement study we define an illness as chronic if the individual reports having asthma cancer heart disease stroke or diabetes for four or more years we first estimate how a chronic illness influences asset accumulation we then estimate how asset accumulation and current poor health influence retirement we observe that the vast majority of the chronically ill population do not report their general health to be poor nor do they report functional limitations in activities of daily living nevertheless our results indicate that chronic illness leads these people to accumulate fewer assets during their working years and consequently retire later neither researchers nor policy makers discussing the many critical issues

invention and innovation under alternative market structures the case of natural resources this paper examines the interactions between market structure and resource allocation over time when there is endogenous technical progress the structures considered are a planned economy pure monopoly and competition with patent rights in an efficient allocation the date of invention coincides with the date of innovation the date at which technology is used this is also true with a pure monopoly but monopoly retards technical progress relative to the efficient level competition for patents rights to a new technology results in excessively rapid technical progress if the resource endowment of the economy is sufficiently large also competition may lead to sleeping patents where invention strictly precedes the date of innovation

price cap regulation and technical change abstract existing analyses of the implications of price cap regulation for the development of cost reducing technologies assume that all r d is done by the regulated industry this is unrealistic we present a simple model of non cooperative r d by a regulated firm and a single external developer under a price cap regime of the sort characterised by cabral and riordan in equilibrium the external developer exerts less r d than is socially optimal the regulated firm may exert more or less a tightening of the regulatory regime impacts the r d incentives of both players though in different ways the optimal regulatory adjustment parameter may be bigger or smaller than that suggested by existing studies despite the scope for duplication of results research by an outsider necessarily enhances welfare

entry deterrence in the commons the authors analyze a common property resource model with a single incumbent firm that faces future potential entry of a rival the cost of harvest from the resource is a function of the stock size by drawing down current stock sufficiently which lowers future stock the incumbent can make entry unprofitable the authors analyze the conditions under which the incumbent firm would deter entry and when entry would be allowed further they analyze the effect that potential entry has on the harvest rate both before and after the date of potential entry and whether or not potential entry is welfare improving copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

pests plagues and patents the paper investigates the interaction between dynamic forms of incentive mechanisms patent systems and dynamic forms of problems adaptations of pests and pathogens since biological problems recur the design of the incentive mechanism must take into consideration a the need for investments into rd and b the impact of this impermanence on the anticipated lifespan of any patent awarded for an innovation the results indicate that patent systems must be carefully tailored to the nature of the problem under consideration jel c7 h0 h3 q38

strategic behaviour of incumbent firms in the uk abstract the main purpose of this paper is to examine the incidence of strategic behaviour in the uk by means of a questionnaire study performed across three broad manufacturing industries food electrical engineering and chemicals of the strategies which have received substantial theoretical attention r d and advertising appear widely used patenting pricing and excess capacity much less so vertical instruments such as purchasing policy also stand out as important but possibly only a minority of firms in our sample actively pursue strategic instruments

health and other asset holdings despite clear evidence of correlations between financial and medical statuses and decisions most models treat financial and health related choices separately this article bridges this gap by proposing a tractable dynamic framework for the joint determination of optimal consumption portfolio holdings health investment and health insurance we solve for the optimal rules in closed form and capitalize on this tractability to gain a better understanding of the conditions under which separation between financial and health related decisions is sensible and of the pathways through which wealth and health determine allocations welfare and other variables of interest such as expected longevity or the value of health furthermore we show that the model is consistent with the observed patterns of individual allocations and provide realistic estimates of the parameters that confirm the relevance of all the main characteristics of the model

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

differences in the rates of return to r d for european and us young leading r d firms this paper examines the sources of europe s lagging business r d performance relative to the us particularly the role played by missing young leading innovators in high technology intensive sectors in europe it investigates through econometric analysis differences in the rates of return to r d of european and us large r d firms it finds that while in the us young firms succeed in realizing significantly higher rates of return to r d as compared to their older counterparts including in high tech sectors european firms fail to generate significant rates of return even if they are yollies and even if they are in high tech sectors these findings can at least partly explain why europe has less r d intensive young leading innovators in high technology intensive sectors

healthy bodies and thick wallets the dual relation between health and economic status there is abundant evidence of a quantitatively large association between many measures of economic status including income and wealth and a variety of health outcomes such as mortality or morbidity however considerable and often heated debate remains especially across disciplines about the direction of causation and about why the association arises although medical scientists are often convinced that the dominant if not exclusive pathway is that variation in socioeconomic status produces health disparities they are increasingly debating among themselves about why low economic status might lead to poor health at least for modern industrial countries 1 the old standby arguments the less well to do have access to less or lower quality medical care or a stronger pattern of deleterious personal behaviors have been rejected as insufficient instead a series of intriguing competing theories have arisen that emphasize long term impacts of early childhood or even inter uterine environmental factors the cumulative effects of prolonged exposures to individual stressful events or reactions to macro societal factors such as rising levels of income inequality a common link is that each theory attempts to document the physiological processes through which low economic status leads to poorer health while these scientific questions are extremely important this research has taken place with little input from economists economists are now making contributions about the alternative pathway the impact poor health may have on economic resources poor health may restrict a family s capacity to earn income or to accumulate assets by limiting work or by raising medical expenses at a minimum this work should provide a caution against exaggerating the magnitude of causation from economic status to health outcomes but the potential contribution runs deeper as people age the evolving variation in individual health outcomes may offer additional statistical information to estimate parameters of household savings and consumption behavior that so far have proven to be somewhat elusive thus incorporating health uncertainty and risk into economic models should eventually enrich our understanding of basic tenets of household behavior the first section of this paper documents the size of the association between health and one prominent economic status measure household wealth section two deals with how health influences economic status by sketching out reasons why health may alter household savings and eventually wealth and then providing estimates of the empirical magnitude of these effects section three shifts attention to the alternative pathway the links between economic status and health and summarizes 2major controversies and evidence surrounding these issues

production experiences and market structure in r d competition abstract in the rd and ii the likelihood of persistent leadership increases with the value of being the winner and the value of being a loser but decreases with expected waiting time of r d innovation and the flow of monopoly profits however destructive innovations may still occur even when production experiences are allowed to play an important role in the r d competition

life expectancy and old age savings rich people women and healthy people live much longer than their poor male and sick counterparts two extremes taken from our analysis of single people in the assets and health dynamics of the oldest old ahead dataset illustrate this point an unhealthy 70 year old male at the twentieth percentile of the permanent income distribution expects to live only 6 more years that is to age 76 in contrast a healthy 70 year old woman at the eightieth percentile of the permanent income distribution expects to live 16 more years thus making it to age 86 such significant differences in life expectancy could all else equal lead to significant differ ences in saving behavior a related observation is that people with high permanent incomes keep large amounts of assets until very late in life table 1 also based on the

trends in natural resource commodity prices an analysis of the time domain abstract this paper attempts to reconcile the theoretical predictions of increasing real prices for nonrenewable natural resource commodities obtained from hotelling style models with the empirical findings of falling prices for these commodities a theoretical model for relative price movements is derived for the case of exogenous technical change and endogenous change in the grade of ores mined the model suggests a u shaped time path for relative prices the implied price movements are tested for all the major metals and fuels and the model parameters are found to be statistically significant for 11 out of the 12 commodities tested

second mover advantages in the strategic adoption of new technology under uncertainty abstract this paper introduces technological uncertainty into a timing game of new technology adoption it is shown that the timing neither necessarily involves first mover advantages in precommitment equilibria reinganum review of economic studies xlviii 1981 395 405 nor rent equalization due to the threat of preemption fudenberg and tirole review of economic studies lii 1985 383 401 rather there may be second mover advantages because of informational spillovers furthermore the model predicts that the equilibrium payoffs will typically be discontinuous and non monotonic in the probability that the new technology is profitable a welfare analysis reveals several market failures and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress

monopoly incentives for cost reducing r d abstract it is shown in this paper that there exist cost innovations for which a monopolist has a higher incentive to invest than a social planner this unveils the limits of the claim based on arrow 1959 that a monopoly always has a lower incentive to innovate than a social planner and therefore than is socially desirable in contrast to previous results the comparison of incentives may also depend upon the demand function finally for a restricted domain of analysis a rule for comparing the monopoly and the social planner incentives is derived

and the winner is acquired entrepreneurship as a contest yielding radical innovations new entrants to a market tend to be superior to incumbents in originating radical innovations we provide a new explanation for this phenomenon based on markets for technology it applies in industries where successful entrepreneurial firms or their technologies are acquired by incumbents that then commercialize the innovation to this end we analyze an innovation game between one incumbent and a large number of entrants in the first stage firms compete to develop innovations of high quality they do so by choosing at equal cost the success probability of their rd the bigger the number of entrants the more radical the most radical project generally entrants tend to choose more radical r d approaches and generate the highest value innovation in case of success we illustrate our theoretical findings by a qualitative empirical study of the electronic design automation industry and derive implications for research and management

the social value of biodiversity for r d the value of genetic resources for use in research and development r d activities has been the subject of a literature modelling the activity as onewhere individual firms engage in optimal search here we develop a moregeneralised framework in which genetic resources are used in r d at thebase of an industry that addresses recurring problems of resistance as inthe pharmaceutical or plant breeding industries the r d process is onein which firms are engaging in a continuing contest of innovation againsta background of both creative destruction schumpeterian competition andadaptive destruction natural selection and adaptation this frameworkdemonstrates that the search model is conceptually inadequate because itfails to incorporate the important dynamic characteristics of biologicalphenomena we then demonstrate the important differences between firm based valuation of genetic resources and the social value of geneticresources for use in this contest of innovation there are six externalitiesin private patent based genetic resource valuation and five of theseindicate that private valuations will under estimate social values

analyzing literature based innovation output indicators the italian experience abstract this paper presents the results of a study on the product innovations introduced in the italian market in 1989 and reported in a selected number of trade journals the analysis of data collected by means of this literature based counting procedure confirms that r d oriented industries and large firms do not in italy have a marked competitive advantage in innovation the country appears to be instead characterized by a significant presence of consumer goods industries and small firms in innovation our data indicate a statistically significant association between trade competitiveness and strength in product innovation and show the comparatively higher capacity for product innovation of some of the industries in which italy achieves a positive performance in international trade moreover the presence of spillovers at the regional level from both private and public r d expenditures proves to be positively correlated with the development of product innovations finally small firms with fewer than 50 employees appear to be more innovative than is usually believed to be the case

intellectual property rights and the mode of technology transfer abstract transferring technology in an environment where patent protection is uncertain can pose significant risks to an innovating firm s ability to appropriate rents this paper incorporates asymmetric information in a screening game where the innovating firm has the choices of licensing a new product at arm s length to a foreign firm exporting it or licensing it to a subsidiary subsidiary production avoids the risk of imitation but involves higher costs for the innovating firm the gains to the southern country from the lack of intellectual property right protection may be offset by strategic behavior by northern firms who opt for technology transfer via subsidiary or monopoly production