section 337 and the protection of intellectual property in the united states the complainants and the impact under section 337 of the tariff act of 1930 a firm can challenge imports that infringe its u s intellectual property rights such as patents copyrights and trademarks based on publicly available information this paper examines the characteristics of firms that file complaints under section 337 and also evaluates how firms are affected by the outcomes we find a complaining firm compared with peer firms in the same industry is typically larger produces a more diverse range of products has invested more in intangibles and is no less profitable a finding of no violation significantly depresses the filing firm s profits compared to peers section 337 appears to protect innovators but its effectiveness in promoting more innovation cannot be demonstrated so clearly copyright 1996 by mit press

competition and corporate performance are people right to think that competition improves corporate performance my investigations indicate first that there are some theoretical reasons for believing this hypothesis to be correct but they are not overwhelming furthermore the existing empirical evidence on this question is weak however the results reported here based on an analysis of around 670 u k companies do provide some support for this view most important i present evidence that competition as measured by increased numbers of competitors or by lower levels of rents is associated with a significantly higher rate of total factor productivity growth

delivering energy efficiency and carbon reduction schemes in england lessons from green deal pioneer places against a background of growing international and national carbon reduction legislation the uk government introduced the green deal to deliver a significant increase in housing energy efficiency and reduction in carbon emissions this paper reflects on one english local authority s experience delivering a programme intended to foster local interest in the green deal drawing on social surveys and pre and post green deal intervention interviews with five demonstrator homes households that applied to receive a green deal package fully funded by the scheme providing a test bed for the green deal recruitment and installation process this paper shows that awareness and understanding of the green deal scheme is low there is opposition to the cost of finance offered but a strong interest in improving household warmth and for funding improvements through payments added to the electricity bill demonstrator home residents perceived green deals had improved the warmth and quality of their home but saving money was the primary motivator for their involvement not increasing warmth whilst green deal has not delivered the level of success that was hoped much can be learned from the scheme to improve future energy efficiency schemes that will be necessary to deliver emission reduction commitments

market share market value and innovation in a panel of british manufacturing firms this paper examines the empirical relationship between technological innovations market share and stock market value new developments in the estimation of dynamic count data models are used to control for unobserved firm specific heterogeneity we find a robust and positive effect of market share on observable headcounts of innovations and patents although increased product market competition in the industry tends to stimulate innovative activity furthermore the impact of innovation on market value is larger for firms with higher market shares we argue that our results are consistent with models where high market share firms have incentives to pre emptively innovate

migration under uncertainty about quality of locations abstract this paper develops a search theoretic framework for analyzing migration decisions of workers who can only observe the quality of a location by migrating to the location after accepting a job there after learning the location quality the worker can stay at the current job search locally at the same location or search for a job at another location leading to repeat migration this paper develops the properties of optimal search migration and repeat migration decisions and finds how revealed location quality influences the tradeoffs between local search and repeat migration the effects of search costs and better job opportunities on the reservation levels of wages and revealed quality levels are also determined

market structure firm characteristics and innovative activity in this study the determinants of product innovation by west german firms operating in the metal industry are investigated a strong positive impact of imperfect competition on innovative activity is estimated aside from competition and barriers to entry factors like the ownership structure of a firm internal finance and the skill level of the workforce are considered one result is that firms led by hired managers tend to innovate less intensively than owner managed enterprises copyright 1989 by blackwell publishing ltd

quality improvements and the incentive to leapfrog abstract in a model of an uncovered market of vertically differentiated products incentives of non identical duopolists to improve the technological maximum quality are analyzed it is assumed that initially firms offer products with different qualities and that the r d cost function changes exogenously this induces a reconsideration of firms quality decisions both firms have the same r d costs for improving the maximum quality quality changes within the existing quality range are assumed to incur only fixed adjustment costs it is shown that the firm which initially is in the low quality position always has a higher incentive to improve industry s quality than its rival if adjustments costs are sufficiently high persistence of dominance may occur for a low degree of initial differentiation low adjustment costs and r d cost functions with a high slope

migrant information job search and the remigration decision labor force migration poses two important questions for the economist the first concerns the nature magnitude and direction of labor force response to perceived earnings differentials over space the latter and more complex question concerns the effectiveness or efficiency of this response namely migration and other market mechanisms in reducing these earnings differentials over time both questions are addressed in this paper by examining relationships among 1 quality of information obtained prior to a move 2 search duration at the migration destination and 3 the likelihood of subsequent perhaps corrective remigration these relationships are analyzed using the human capital model of migration remigration and data from the 1970 u s census excerpt

on the equilibrium proportion of innovation and imitation abstract a game theoretic model is developed that analyses firms decisions concerning innovation and imitation it is shown that in a game of identical players an equilibrium between innovation and imitation exists this non cooperative equilibrium is globally stable if a sequential time structure is supposed however the equilibrium is not pareto efficient

an empirical test of the asymmetric models on innovative activity who invests more into r d the incumbent or the challenger the theoretical discussion concerning the question whether the incumbent or the potential entrant invests more into r d has attracted considerable interest this paper reports the results of an empirical study on this question using data of about 3500 german firms over the years 1992 to 1995 the survey explicitly asks the firms for their motives to undertake innovative activity it is thus possible to take account of intended not just completed market entry it turns out that the challenger invests more into r d in order to enter a new market than the incumbent thus the patent racing model by reinganum and others seems to characterize innovative activity more accurately than the competing auction model of gilbert and newbery we use a heteroscedastic tobit as well as a tobit model with selectivity in order to deal with the econometric problems of double censoring

the determinants of technology adoption the case of the banking firm using data on the adoption of automatic teller machines by firms in the banking industry this study examines the relationship between the decision to adopt new technology and its determinants since banking firms differ considerably in terms of the competitive environments in which they operate focusing on this one innovation in this industry allows a stronger test of the relationship between market structure and the adoption of new technology than has been previously conducted using a failure time estimation procedure we find that larger banks and banks operating in more concentrated local banking markets register a higher conditional probability of adopting this new technology all else equal we also find that other results are consistent with the underlying model and that the bank s regulatory environment shapes its adoption decision in plausible ways

attracting skeptical buyers negotiating for intellectual property rights expropriable disclosures of knowledge to prospective buyers may be necessary to facilitate the sale of intellectual property ip in principle confidentiality agreements can protect disclosures by granting the seller rights to sue for unauthorized use in practice sellers often waive confidentiality rights we provide an incomplete information explanation for the waiver of confidentiality rights that are valuable in complete information settings waiving sacrifices the protective value of confidentiality to gain greater buyer participation buyer skepticism which reduces participation arises endogenously from three elements asymmetric information regarding seller ip rent dissipation from competition for ip and ex post costs from expropriation lawsuits

strategic timing of adoption of new technologies under uncertainty abstract in this paper we introduce experience effects into a duopoly game of timing of adoption of new technologies which exhibit exogenous technological progress departing from the existing literature with this model we obtain continuous and downward sloping reaction functions we find that a higher level of uncertainty increases the extent of dispersion between the equilibrium timings of adoption furthermore we find that the equilibrium timings are even more dispersed when the leader takes the follower s reaction into account when firm roles are made endogenous we find that if there is an incentive to lead follow the equilibrium timings are more less dispersed finally we show that it is possible for collusive adoption to improve welfare

regulation and preemptive technology adoption two rival firms must decide if and when to adopt a new technology knowing how adoption costs decline over time and how profit flows vary with adoption patterns in many cases price and entry regulations beneficially slow technology adoption by making preemption strategies less attractive in some cases these regulations can so discourage a firm from preemption as to change the order in which firms adopt new technologies speeding one firm s adoption date and slowing the other s in the context of a particular scenario for cable and telephone companies adoption of new fiber optic technologies the case for lifting the cross ownership ban depends on the extent to which telephone companies are able to implement a superior technology reregulation of cable companies strengthens this case

foreign ownership and technology adoption evidence from indian firms abstract firms in developing countries rely on foreign technology purchases to improve their technology we use a theoretical framework developed by katz and shapiro to examine the ongoing technology adoption behavior of foreign owned and domestic firms using firm level data on indian firms from 1989 to 1993 we test this theoretical model we find that foreign ownership firm size and market structure are among the variables that impact a firm s probability of adopting new technology we also find that the 1991 liberalization of technology transfer policies in india appears to have had a larger impact on foreign owned firms than domestic firms

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

strategic timing of adoption of new technologies under uncertainty a note abstract this note clarifies the circumstances under which ex ante identical firms will choose different dates for the adoption of new technology in particular conditions under which diffusion will arise in both open loop and closed loop games are identified furthermore it is shown that the rents of nonidentical firms are not equalized even if pre emptive adoption is possible finally an example is given in which the reduction of the uncertainty associated with the implementation of new technology leads to a postponement of the adoption by the late adopter

quantifying the severity of fuel poverty its relationship with poor housing and reasons for non investment in energy saving measures in ireland fuel poverty has generally been calculated by quantifying the number of households spending in excess of 10 of income on home heating this definition has a number of significant practical and scientific limitations this paper employs self reported data to calculate the severity of fuel poverty in ireland to identify chronic fuel poor households from occasional sufferers it also assesses domestic energy efficiency levels ireland is a useful case study as it demonstrates the highest variations in seasonal mortality and morbidity in northern europe both of which are associated with fuel poverty ireland is also experiencing extreme difficulties meeting its environmental emissions targets in light of recent spectacular economic growth reducing fuel poverty would lower energy related emissions assisting policy makers achieve these challenging targets furthermore little empirical research has been undertaken on fuel poverty in ireland this paper identifies key social groups at risk by conducting detailed socio economic and socio demographic analyses the relationship between fuel poverty and adverse housing conditions damp condensation is also examined moreover the reasons behind householders not investing in energy saving measures are reported the results show that ireland suffers from similar levels of fuel poverty as the uk with low income households suffering the greatest the key policy implications are outlined

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

strategic incentives for innovations and market competition abstract we consider a principal agent model to provide a general analysis of how risk affects incentives of firms who invest in cost reducing r d and compete in the product market we specify the conditions under which higher risk reduces incentives of all firms we also examine the conditions under which an increase in risk may trigger opposite responses of rivals in the same industry some firms will strengthen while other firms will weaken the incentives provided to their agents this result holds regardless of the mode of competition in the product market cournot or bertrand as long as the rivals r d decisions are strategic substitutes it can generate new empirical implications and can provide an explanation for the lack of strong empirical support in the literature for a negative relationship between risk and incentives we also discuss policy implications regarding the effect of risk on the incentives to innovate and welfare

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

non capital investment costs and the adoption of cad and cnc in the u s metalworking industries many studies have shown that firm size is the strongest and most consistent predictor of the adoption of technological innovations but the causes for this relationship are debated i investigate the relationships between various size measures and the adoption of computer aided design cad and computer numerically controlled cnc machine tools plant size is the dominant factor in predicting cad and cnc adoption other measures such as firm size or multiplant operations have independent effects that are not present after controlling for plant size i test four potential explanations for the results noncapital cost spreading equipment replacement risk aversion and learning there is support only for the first explanation

preemptive adoptions of an emerging technology many oligopolies exhibit continuing technological change and lumpy costs of adopting new technologies if firms choose adoption dates in a game of timing and if the downstream market structure is a bertrand duopoly the equilibrium adoption pattern displays rent dissipating increasing dominance i e all adoptions are by the same firm and the discounted value of profits is zero these results need not hold for other market structures including cournot duopoly copyright 1994 by blackwell publishing ltd

innovation timing games a general framework with applications abstract we offer a new algorithm for analyzing innovation timing games its main advantage over the traditional approach is that it applies to problems that had previously been intractable we use the algorithm to examine two classical innovation problems we find that the competition takes the form of a waiting game with a second mover advantage either for any level of r d costs process innovation or for high r d costs product innovation moreover both models predict that the second mover advantage is monotonically increasing in the costs of r d

innovation and imitation in an asymmetrically regulated industry abstract we model a game of innovation and imitation between a regulated firm and an unregulated firm although regulation may slow the industry wide pace of innovation it does not necessarily do so in fact by weakening the regulated firm s incentive to imitate a rival s successful new technology regulation may make the rival s innovation profitable thereby accelerating innovation by extension giving the regulated firm stronger incentives may backfire by producing either excessive or insufficient innovation these negative outcomes are more likely the greater is the cost reducing potential offered by the new technology

reputations in the adoption of a new technology abstract this paper studies the effects of uncertainty on the timing of adoption of a new technology in a duopoly firms are uncertain of the innovative capabilities of their rivals and about the profitability of adoption these features lead to a richer and in some respects more plausible theory of adoption in which rents from delayed adoption are always realized and returns are not equalized across adoption times

deterrence by market sharing a strategic incentive for licensing the potential of an incumbent firm to retain its dominant position in a market is a focal point of the modem theory of industrial organization a recent literature examines this issue for markets in which challengers threaten an incumbent s position by engaging in research for a new technology richard gilbert and david newbery 1982 show that an incumbent firm with a firstmover advantage will preempt potential entrants by inventing a new technology slightly earlier than would its rivals in a stochastic r d therefore its introduction does not alter the decision to research when the pre innovation market is characterized by an incumbent and potential entrants stephen salant 1984 shows that licensing ex post to innovation can alter the research decision as anticipation of the returns from future licensing encourages research by the entrant as a counterpoint to the salant result i find that licensing ex ante to research may discourage further research by the entrant indeed this strategic incentive for licensing may be so strong as to persuade the incumbent as well as the entrant to terminate research activity to isolate this incentive for licensing from the one discussed by salant a simple model is constructed in which licensing of future technologies is not desirable anecdotal evidence suggests that the strategic incentive does lead innovators in some markets to license their technologies examples of this information sharing are prevalent in markets where technological change is rapid in the 1940 s standard oil of new jersey discovered a process for synthetic rubber it traded patent rights on this process for a synthetic oil production process discovered by farben a german rubber company in both the synthetic oil and synthetic rubber markets rival companies were department of economics scarsborough college university of toronto toronto ontario canada m5s lal i thank jon cohen and ron saunders for discussions that inspired this paper i am also grateful to yehuda kotowitz andy mclennan jennifer reinganum ralph winter myma wooders two anonymous referees and seminar participants at the university of toronto for helpful comments on earlier drafts

attitudes and behaviours of private sector landlords towards the energy efficiency of tenanted homes abstract the uk s housing stock generates approximately 27 of the country s total annual carbon emissions in light of the legally binding targets to reduce carbon emissions new housing is subject to a tightening of regulations governing energy demand and efficiency resulting in a gradual improvement in carbon emissions the question is how to achieve the deep carbon emission reductions from existing domestic properties of which 75 will still be in use in 2050 government has sought to provide incentives to homeowners to improve the energy efficiency of their households and mandate improvements in socially rented housing using a range of fiscal measures most recently the green deal there has however been little consideration of the 18 of uk households who privately rent their home a tenure that is growing fast the aim of this research is to investigate the factors that influence private sector landlords when considering energy efficiency improvements to their tenanted homes the results indicate that government policy has consistently failed to engage private sector landlords in the issue of energy efficiency and thus measures must be taken to understand the motivations of landlords in order to design effective incentives and interventions

on vertical relations and the timing of technology adoption we study the timing of new technology adoption in markets with input outsourcing and thus with vertical relations we find that technology adoption can take place earlier when firms engage in input outsourcing than when they produce the input in house hence the presence of vertical relations can accelerate the adoption of a new technology we also find that particular features of a vertically related market such as the distribution of bargaining power and the contract type through which trading is conducted can crucially affect the speed of technology adoption

the incentives for cost reduction in a differentiated industry abstract this paper investigates how the incentives for cost reduction in a differentiated industry depend upon the degree of product substitutability when goods are imperfect substitutes both cournot and bertrand competition result in underinvestment in the sense that a social planner would be willing to pay more for a given cost reduction than a profit maximizing firm overinvestment may occur when the goods are sufficiently close substitutes similarly cournot competition provides a stronger incentive to innovate than bertrand competition if the degree of substitutability is low and a weaker incentive if this degree is high

low energy efficiency in rental properties asymmetric information or low willingness to pay abstract asymmetric information may explain low energy efficiency in rented properties energy ratings while a solution to the information problem will only lead to higher efficiency levels if renter s willingness to pay wtp exceeds landlord s investment costs using a sample of renters from one university this paper estimates this wtp using a discrete choice experiment where respondents choose from a hypothetical set of single bedroom apartments that differ according to a number of attributes including the energy rating results show that there is a strong disutility associated with the least efficient properties and that renters will pay significantly more for efficiency improvements at the lower end of the efficiency scale importantly our wtp estimates are calculated in a setting where respondents were informed about the energy rating system prior to choosing and where the rating was shown for every property therefore in order to maximise the impact of energy rating systems policymakers are encouraged to ensure that both these informational characteristics are in place

a dynamic analysis of the adoption of a new technology the case of optical scanners two p roportional hazard models are used to investigate the differingeffects of marke t structure variables on the conditional probabilityof a firm initially adoptin g the new technology of optical scanners as the innovation spreads through the f ood store industry during the early stage leading firms with large average sto re size which are not members of chains and which operate in less concentrated m arkets with higher incomes and wage rates tend to adopt scanners sooner later on differences in seller concentration market share and size become less impo rtant as other firms follow prior adoptions copyright 1987 by mit press

coping with low incomes and cold homes abstract this paper presents findings from a study of low income households in great britain which explored households strategies for coping both with limited financial resources in the winter months when demand for domestic energy increases and in some cases with cold homes the study combined a national survey of 699 households with an income below 60 per cent of national median income with in depth interviews with a subsample of 50 households the primary strategy adopted by low income households to cope with financial constraint was to reduce spending including spending on essentials such as food and fuel and thereby keep up with core financial commitments while spending on food was usually reduced by cutting the range and quality of food purchased spending on energy was usually reduced by cutting consumption sixty three per cent of low income households had cut their energy consumption in the previous winter and 47 per cent had experienced cold homes improvements to the thermal performance of homes reduced but did not eliminate the risk of going cold as any heating cost could be a burden to households on the lowest incomes householders attitudes were central to their coping strategies with most expressing a determination to get by come what may

comparing cournot and bertrand equilibria in a differentiated duopoly with product r d abstract this paper compares bertrand and cournot equilibria in a differentiated duopoly with substitute goods and product r d i find that r d expenditure prices and firms net profits are always higher under quantity competition than under price competition furthermore output consumer surplus and total welfare are higher in the bertrand equilibrium than in the cournot equilibrium if either r d spillovers are weak or products are sufficiently differentiated if r d spillovers are strong and products are not too differentiated then output consumer surplus and total welfare are lower in the bertrand case than in the cournot case thus a key finding of the paper is that there are circumstances where quantity competition can be more beneficial than price competition both for consumers and for firms

on the dynamic efficiency of bertrand and cournot equilibria abstract this paper compares bertrand and cournot equilibria in a differentiated duopoly with r d research and development competition it shows that cournot competition induces more r d effort than bertrand competition however the price is lower and output is larger in bertrand than in cournot competition furthermore the bertrand equilibrium is more efficient than the cournot equilibrium if either r d productivity is low or spillovers are weak or products are very different if r d productivity is high spillovers are strong and goods are close substitutes then the bertrand equilibrium islessefficient than the cournot equilibrium journal of economic literatureclassification number l13

analyzing the evidence of an ipr take off in china and india abstract both china and india have been experiencing a historical take off in the use of intellectual property rights ipr in terms of trademark applications filed with domestic ip offices in 2009 the evidence demonstrates that china now ranks 1st worldwide and india 5th while for patent filings china ranks 3rd worldwide and india ranks 9th this performance is remarkable as both china and india experienced negligible demand for ipr protection as recently as two decades ago the ipr take up trends in these two countries are analyzed in detail highlighting the structure of patent and trademark demand since 1990 specifically the available series are broken down and analyzed according to i national versus foreign origin of patents and trademarks ii technological ipc and trademark nice classes and iii the major individual patent users in each country the data used refers to applications in the chinese and indian ip offices although the demand from residents of these two countries in both the international and other national systems is also assessed beyond the existing momentum in ipr registrations by china and india and their capacity to maintain it into the near future the paper addresses practical questions about the strategies motives and benefits behind the current trends in particular we seek to evaluate the capacity of both china s and india s national innovation systems to internalize the potential returns of this increasing demand for ipr the insight reached finds that should both china and india sustain their current ipr growth rates they will be able to catch up with the most advanced economies within the time span of a few decades

rival precedence and the dynamics of technology adoption an empirical analysis this study employs information on the adoption of automatic teller machines by banking firms to examine the nature of firm reactions to rival precedence in the adoption process using a failure time estimation procedure it is found that the ado ption of this innovation by rivals increases the conditional probabil ity that a decision to adopt will be made the effect of spillovers f rom technology adoption and the interaction of market concentration a nd rival precedence are also investigated finally the study shows w ith an example how the estimation procedure may be used to test the u nderpinnings of diffusion processes copyright 1987 by the review of economic studies limited

energy poor or fuel poor what are the differences abstract energy poverty and fuel poverty are descriptors of problems of households energy consumption they are both distinct problems and have been addressed by many researchers organizations and governments cross use of the terms of energy poverty and fuel poverty in published papers is common as an accurate descriptor is the presupposition of research and policy development especially for those who just started to pay attention to this issue this paper compares the definitions research priorities status quo and problems of these two concepts and summarizes the relationship between them the paper suggests that only when the research targets are households who are living in a cold climate and have difficulty in getting access to electricity or modern cooking facilities and in supplying indoor heating with appropriate cost the concepts of energy poverty and fuel poverty have the chance to be broadened and mutually integrated

unbundling the local loop abstract we study competition for high bandwidth services in the telecommunications industry by introducing the possibility of unbundling the local loop where leased lines permit the entrant to provide services without building up its own infrastructure we use a dynamic model of technology adoption and study the incentives of the entrant to lease loops and compete service based and or to build up a new and more efficient infrastructure and compete facility based given the rental price we show that the incumbent sets too low a rental price for its loops hence the entrant adopts the new technology too late from a social welfare perspective the distortion may appear not only on the timing of technology adoption but also on the type quality of the new technology to be adopted we also show that while regulating the rental price may suffice to achieve socially desirable outcomes a sunset clause does not improve social welfare

definitions of fuel poverty implications for policy abstract this paper outlines why the definition of fuel poverty is important in policy formulation and describes how the government s current definitions evolved from the original concept it discusses the determination of income and fuel costs and the possibilities for a relative and common european measure it examines problems inherent in assessing fuel costs as a percentage of income and puts forward the arguments for a budget standard approach the paper illustrates how the size of the problem depends on the definition and chosen threshold and suggests advantages for a rating scale it illustrates how the income composition and thresholds also govern the distribution of the target populations and the relative importance of the main causal factors and examines the consequent policy implications it explores the definition of vulnerable households and the importance of severity and questions whether the uk fuel poverty strategy is targeted at households least able to afford their fuel costs as the name implies or primarily those at risk from excess winter and summer mortality and morbidity finally after examining the role of supplementary indicators it looks at the opportunities for changing the definition and comments on the government review of the definition and targets

on the efficiency of bertrand and cournot equilibria with product differentation in a differentiated products setting with n varieties it is shown under certain regularity conditions that if the demand structure is symmetric and bertrand and cournot equilibria are unique then prices and profits are larger and quantities smaller in cournot than in bertrand competition and as n grows both equilibria converge to the efficient outcome at a rate of at least 1n if bertrand reaction functions slope upwards and are continuous then even with an asymmetric demand structure given any cournot equilibrium price vector one can find a bertrand equilibrium with lower prices in particular if the bertrand equilibrium is unique then it has lower prices than any cournot equilibrium

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

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

labor force migration and allocative efficiency in the united states the roles of information and psychic costs this paper examines the relative importance of information psychic and other costs of relocation as mitigating factors off sets to spatial earnings differentials within the migration decision the method employed for this examination is based upon 1 observation of relationships between the geographic allocation and personal characteristics of labor force migrants and 2 inferences drawn from these observations about the relative importance of various relocation cost components empirical analyses of the migration decision based upon this indirect method provide important insights on both the determinants and allocative efficiency of interstate labor force migration in the united states excerpt

product differentiation process r d and the nature of market competition abstract we investigate the relationship between process and product rd ii bertrand firms have a stronger incentive for product rd and iii cooperation in product r d promotes both types of r d relative to competition whereas cooperation in both types of r d discourages r d relative to cooperation in just product r d

migration and wage growth a human capital approach the purpose of this paper is to analyze migration as an investment in human capital using panel data the authors focus on two issues the first is the economic motivation for migration and the reasons some movers receive high returns relative to other migrants the second issue and the major focus of the paper is a test of the human capital model explaining wage profiles of nonmovers first time and repeat migrants the data are from the national longitudinal survey of young males 1966 1971 cross section and concern the united states excerpt

the diffusion of new technology and the market for an innovation this article shows that the diffusion of a capital embodied process innovation results from a pattern of decreasing incremental benefits and adoption costs for later adoptions strategic behavior is inessential to this finding we develop a method for comparing diffusion rates for different market structures in the capital equipment market we consider cases with market power on the seller s side of the market and on the buyers side of the market a case with no market power and the welfare optimal case we find that a joint venture adopts an innovation more slowly than other market regimes to protect existing capital investments and that the adoption rate is slower than is socially optimal a monopoly supplier on the other hand adopts at a rate faster than is socially optimal this result is usually also the case when there is no market power finally we show that the monopoly supplier accelerates adoptions faster than in the case where there is no market power but retards later adoptions market power thus makes a difference in diffusion rates and on which side of the market that power lies makes a considerable difference

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

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

on the diffusion of new technology a game theoretic approach this paper is an attempt at a rigorous albeit not exceedingly general analysis of the diffusion of new technology in particular consider an industry composed of two firms each using the current best practice technology the firms are assumed to be operating at nash equilibrium output levels generating a market price given demand and profit allocations when a cost reducing innovation is announced each firm must determine when if ever to adopt it based in part upon the discounted cost of implementing the new technology and in part upon the behavior of the rival firm if either firm adopts before the other it can expect to make substantial profits at the expense of the other firm on the other hand the discounted sum of purchase price and adjustment costs may decline with the lengthening of the adjustment period as various quasi fixed factors become more easily variable therefore although waiting costs the firm more in terms of foregone profits it may save money on the cost of purchasing the new technology thus the firm must weigh the costs and benefits of delaying adoption as well as take account of its rival s strategic behavior

an empirical analysis of strategic competition and firm values the case of r d competition abstract we operationalize a firm s competitive strategy through a new empirical measure and develop a framework for empirical analysis of the market value of strategic behavior using this framework we study announcement effects of r d spending the announcing firm s stock prices are positively influenced by a change in spending and negatively by our competitive strategy measure csm competitors stock prices are positively influenced by the interaction between the market s reaction to the announcing firm and the csm our results are consistent with positive effects of accommodating competition with strategic substitutes and nonpositive effects of tough competition with strategic complements

an empirical investigation into students experience of fuel poverty abstract the trend of expansion in higher education in the uk since 1992 has created a massive demand for accommodation for students where the housing stock is one of the oldest and least efficient in europe and the private rented sector is often singled out for containing some of the least energy efficient and in worst condition properties the extent to which students factor in energy efficiency and fuel poverty concerns into their accommodation choices is explored in this paper along with the perception of the phenomena by students from a survey of 286 students it was revealed that while students themselves may not consider themselves to be living in fuel poverty the activities taken in their day to day lives suggest the opposite the impact of the housing stock on student quality of life is investigated as well

general licensing schemes for a cost reducing innovation optimal combinations of upfront fees and royalties are considered for a cost reducing innovation in a cournot oligopoly for both outside and incumbent innovators it is shown that for any nondrastic innovation a the license is practically sold to all firms ensuring full diffusion of the innovation b consumers are better off firms are worse off and the social welfare is improved c the optimal licensing policy involves positive royalty for relatively significant innovations d compared to an incumbent firm an outsider invests more in r d and has higher incentive to innovate and e as a function of the magnitude of the innovation the industry size that provides the highest incentive to innovate is u shaped

incomplete adoption of a superior innovation we consider a model in which an innovating monopolist of a technologically superior intermediate input must sell this product to final output producers prior research shows that with complete information the monopolist s optimal strategy will lead to complete adoption of this technologically superior innovation in this article we show that when the price of some competitively supplied input used in the final product market is endogenous and is altered by adoption of the innovation then the optimal pricing strategy of the monopolist may lead to incomplete innovation thus the standard result of complete adoption of the superior technology is partly attributable to the partial equilibrium nature of prior models

preemption and rent equalization in the adoption of new technology we study the adoption of a new technology to illustrate the effects of preemption in games of timing we show that the threat of preemption equalizes rents in a duopoly but that this result does not extend to the general oligopoly game if the gain to preemption is sufficiently small then the optimal symmetric outcome which involves late adoption is an equilibrium this contrasts with reinganum s result that in precommitment equilibria there must be diffusion we develop a new and richer formalism for modeling games of timing which permits a continuoustime representation of the limit of discrete time mixed strategy equilibria

to innovate or imitate entry strategy and the role of market research abstract a firm planning market entry can attempt to develop a product that is either similar to the incumbent s existing offering imitation or entirely novel innovation the authors establish that when the incumbent is more aggressive in research and development r d this negatively affects the entrant s marginal return on r d thus if greater profits produce a strong weak desire for the incumbent to increase its r d level the entrant will respond by sharply decreasing increasing its r d level as a result the incumbent s likelihood of retaining the lead position will exhibit an inverse u shaped pattern as a function of monopoly and duopoly profits the authors then examine the impact of uncertainty about the rewards from new products and allow firms to conduct market research to resolve the uncertainty they characterize the conditions for the entrant s innovation versus imitation decision to reveal information about future rewards to the incumbent when duopoly profits are uncertain and ca

market research and innovation strategy in a duopoly we model a duopoly in which ex ante identical firms must decide where to direct their innovation efforts the firms face market uncertainty about consumers preferences for innovation on two product attributes and technology uncertainty about the success of their research and development r d investments firms can conduct costly market research before setting r d strategy we find that the value of market information to a firm depends on whether its rival is expected to obtain this information in equilibrium consequently one firm may forgo market research even though its rival conducts such research and learns the true state of demand we examine both vertical and horizontal demand structures with vertical preferences firms are a priori uncertain about which attribute all consumers will value more in this case a firm that conducts market research always attempts innovation on the attribute it discovers that consumers prefer and expends more on r d than a rival that has not conducted market research with horizontal preferences distinct segments exist each caring about innovation on only one attribute and firms are a priori uncertain how many consumers each segment contains in this case a firm that conducts market research may follow a niche strategy and attempt innovation to serve the smaller segment to avoid intense price competition for the larger segment a firm that conducts market research may therefore invest less in r d and earn lower postlaunch profits than a rival that has forgone such research

timing of technology adoption and product market competition abstract this paper examines how product market competition affects firms timing of adopting a new technology as well as whether the market provides sufficient adoption incentives it demonstrates that adoption dates differ not only among symmetric firms but also among markets with different market features more specifically technology adoption can occur earlier in a market with cournot competition than in a market with bertrand competition it can also occur earlier in a market in which goods are not too close substitutes therefore this paper shows that competition toughness does not always reinforce adoption incentives when goods are sufficiently differentiated adoption occurs later than is socially optimal

obtaining strategic advantage from being imitated when can encouraging clones pay an important business strategy research theme concerns finding ways to minimize competition faced by the firm this paper however focuses on a different set of situations the model developed suggests that an innovator s best strategy may be to encourage clones of its product when a network externality is present key factors to consider in assessing whether encouraging cloning is the innovator s best strategy are 1 the benefit to be derived in terms of added user base contributed by the clone sales traded off against 2 the unit sales that will be lost to the clones these factors in turn depend upon the strength of the network effect and the degree to which the innovator s product quality is perceived by consumers to be superior to the clone s the model further suggests that both the innovator and clone earn their highest payoffs when the clone takes the lead in price setting i e when the clone establishes its own price by considering for each price it might set how the innovator will react to that price and the innovator as price follower responds to the price the clone chooses the paper demonstrates that the clone leader innovator follower situation represents the unique nash equilibrium in price setting strategies a central implication is that when operating in a network externality environment instead of a problem to be avoided clones may be valuable assets to an innovating firm building up the user base for the innovator s technology by bringing lower valuing consumers into the market which in turn makes the innovator s product more attractive to high and medium valuing purchasers thus when the above described conditions hold being cloned can be more profitable for an innovating firm than dominating the market alone

exchange rate management in emerging markets intervention via an electronic limit order book this paper describes and analyzes the implementation of a crawling exchange rate band on an electronic trading platform the placement of limit orders at the central bank s target rate serves as a credible policy statement that may coordinate beliefs of market participants we find for our sample that intervention increases exchange rate volatility and spread for the next minutes but that intervention days show a lower degree of volatility and spread than non intervention days we also show for intraday data that the price impact of interbank order flow is smaller on intervention days than on non intervention days these stabilizing effects however rely on the conditions of large currency reserves and the existence of capital controls an electronic market seems to support this goal

the sale of unprotected inventions under alternative models of contracting behavior abstract when property rights are unavailable or unenforceable for a specific invention it has been shown am econ rev 84 1994 190 that it may still be possible for an independent inventor to enjoy some of the surplus generated by his invention in this paper i consider the case of an independent inventor with bargaining power who is free to choose the form of contracting when attempting to sell a valuable invention to firms in a duopoly industry i show that an inventor with small wealth can do no better than to disclose his invention to a randomly chosen firm and make a contract offer for moderate wealth i show that even though industry profit is maximized under a monopoly structure the inventor may be indifferent between selling the invention to both firms by signaling the value of his invention which is accomplished by offering contracts to both firms and selling the invention to one firm by offering a contract when wealth becomes sufficiently large i show that it is always more profitable for the inventor to signal the value of his invention by offering a contract to only one firm

fuel poverty and energy efficiency obligations a critical assessment of the supplier obligation in the uk energy efficiency obligations or white certificates are increasingly used to reduce carbon emissions while the energy efficiency obligations were originally intended as carbon reduction and not fuel poverty policies due to recognition of the potential for regressive outcomes they often include provisions for vulnerable and low income customers intuitively reducing carbon emissions and alleviating fuel poverty seem to be two sides of the same coin there are however considerable tensions between the two when addressed through energy efficiency obligations particularly arising from the potentially regressive impacts of rising energy prices resulting from such obligations but also the complexity of targeting fuel poor households and the implications for deliverability despite those tensions the uk government decided to use energy efficiency obligations the supplier obligation as the main policy for reducing fuel poverty in light of the proposals this paper provides an analysis of the main tensions between carbon reduction and fuel poverty alleviation within energy efficiency obligations outlines the fuel poverty provisions of the british supplier obligation assesses its rules for identifying the fuel poor and provides a critical analysis of the planned policy changes based on this analysis alternative approaches to targeting fuel poverty within future supplier obligations are proposed

home economic conditions and the decision to migrate new evidence for the u s labor force labor force response to differential economic conditions across space has received considerable attention within the economic literature on labor mobility and migration based upon research on this topic described within survey articles by greenwood 6 ritchey 20 and shaw 23 a consensus has developed namely that the level and propensity of labor force out migration from an area are unaffected by economic conditions within that area on the other hand demographic characteristics of the resident population and economic conditions outside the area are commonly believed to have significant influence on both the magnitude and direction of this outflow this apparent economic paradox was supported by early work of perloff et al 19 lowry 14 and lansing and mueller 10 although a significant exception appeared in a later study by miller 17 recent econometric studies have in general reconfirmed this paradox for instance graves 5 234 found results for origin economic conditions that run counter to the usual expectations levy and wadycki 12 present origin economic variables that are either insignificant or of wrong sign finally in one of the most recent and comprehensive studies of place to place migration fields 3 27 concludes that in

employment status and the decision to migrate the purpose of this paper is to examine the demographic and socioeconomic determinants of migration for both the employed and unemployed hypotheses concerning the effects of age education and public services are developed and tested using data on interstate migration of the u s labor force from 1965 to 1970 for individuals at risk to either primary or repeat migration the age and education selectivity of migration were in general confirmed however for unemployed potential primary migrants education selectivity was not observed it was also found that the provision of welfare services have little or no impact on the migration decision of the unemployed however unemployment was shown to significantly affect the role played by educational quality and training accessibility within the migration decision excerpt