is approval voting an unmitigated evil a response to brams fishburn and merrill brams fishburn and merrill 1988 contend that the indeterminacy of approval voting av introduced in our paper 1988 is not a vice but a surpassing virtue of av they do not compare the negative versus the positive features of av so their assertion remains a conjecture our response emphasizes the need to determine the costs of av and to evaluate them against any merits moreover by correcting and answering bfm s comments the argument against av becomes much stronger this is because we show that av s region of indeterminacy is quite large it includes most profiles some of the consequences of this instability are that the av outcome can negate the voter s true wishes that the av outcome can be volatile even to minor fluctuations of voter s decisions and that av is one of the most susceptible systems to manipulation by small groups of voters for example small maverick groups could determine the av outcome under specific circumstances av may be appropriate to identify these situations we propose the more accurate name of the unsophisticated voter system

regional innovation systems in hungary the failing synergy at the national level lengyel b and leydesdorff l regional innovation systems in hungary the failing synergy at the national level regional studies entropy statistics are used in this paper to measure the synergies of knowledge exploration knowledge exploitation and organizational control in the hungarian innovation system the data consist of high and medium technology firms and knowledge intensive services categorized by subregions proxy for geography industrial sectors proxy for technology and firm size proxy for organization configurational information along these three dimensions is used as an indicator of a reduction of uncertainty or in other words the synergy across the knowledge functions the results indicate that three regimes have been created during the hungarian transition with very different dynamics 1 budapest and its agglomeration emerge as a knowledge based innovation system on every indicator 2 the north western part of the country where foreign owned companies have induced a shift

a model of forum shopping owners of intellectual property or mere sponsors of an idea e g authors security issuers sponsors of standards resort to more or less independent certifiers to persuade potential users buyers or adopters of the worth of their property or idea we analyze the sponsor s choices ofcertifier and design social preferences regarding these choices and the impacts thereon of multiple categories of users of a downstream presence of the sponsor and of certifier market power finally we study strategic forum shopping by sponsors of competing ideas

standard essential patents a major policy issue in standard setting is that patents that are ex ante not that important by being included into a standard may become standard essential patents in an attempt to curb the monopoly power that they create most standard setting organizations require the owners of patents covered by the standard to make a loose commitment to grant licenses on reasonable terms such commitments unsurprisingly are conducive to litigation this paper builds a framework for the analysis of these patents identifies several types of inefficiencies attached to the lack of price commitments and shows how structured price commitments restore competition and why such commitments may not arise spontaneously in the marketplace

standard setting committees consensus governance for shared technology platforms voluntary standard setting organizations ssos use a consensus process to create new compatibility standards practitioners have suggested that ssos are increasingly politicized and perhaps incapable of producing timely standards this article develops a simple model of standard setting committees and tests its predictions using data from the internet engineering task force an sso that produces many of the standards used to run the internet the results show that an observed slowdown in standards production between 1993 and 2003 can be linked to distributional conflicts created by the rapid commercialization of the internet jel c78 l15 l86

intellectual property rights strategic technology agreements and market structure the case of gsm this paper investigates the role of intellectual property rights iprs in shaping the gsm industry this industry is an example of a high tech industry in which standards play a large role in the process of designing the gsm standard a lot of attention has been given to iprs mainly to avoid a situation in which a single ipr holder could hamper or even totally block the development of the standard nevertheless the ultimate gsm standard contains a large amount of so called essential iprs i e iprs without which the implementation of gsm products is impossible the paper starts with a general discussion of the development of gsm and the role of firm strategy and iprs in this process next we present a database on the essential iprs in the gsm standard this database has been compiled on the basis of international patent statistics and the data that manufacturers have supplied to etsi the european standardization body re sponsible for defining the gsm standard we use this database to assess the dynamic ipr position of firms in the original gsm standard and its subsequent development in a next part of our analysis we relate the firm s ipr p osition to the trends in strategic technology agreements in the mobile telecommunications field we ask the question whether firms that are powerful in terms of iprs are also the firms that are central in the technology agreements network or vice versa we also investigate whether developments over time in the technology agreements data follow from the dynamic movements in the ipr position of a firm and which other factors play a role in this

the source of some paradoxes from social choice and probability abstract an elementary argument is developed to explain and unite several paradoxes coming from probability and from social choice this geometric approach is illustrated with new results about the intransitivities of election rankings over subsets of alternatives agenda manipulation conditional probability and waiting times

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

public policies to support basic research what can the rest of the world learn from us theory and practice and what they should not learn the information based theoretical model for public support of basic research developed in the usa at the end of the 1950s has held up well in practice in spite of its neglect of training benefits of necessary investment in research infrastructure and of its consequently limited relevance outside the usa at the same time us practice in basic research has often been misinterpreted as being driven by short term usefulness whereas its key features are massive and pluralistic government funding high academic quality and the ability to invest in the long term development of new often multi disciplinary fields challenges for the future include greater and often ill judged pressures from governments for demonstrable usefulness of the basic research it supports the entirely separate development of direct links to application in bio medical and software fields and more complicated links between basic research and application resulting from the changes in the internationalisation of corporate r d effective policies will depend on better understanding of what makes universities responsive to investments in promising new fields of research and teaching how and why basic fields of great practical usefulness emerge and how basic research requirements are conditioned by a country s level and pattern of economic development bibliometric data could make a considerable contribution if it was more widely recognised that they have informational properties similar to the output of basic research and therefore deserve public support this paper was prepared for the celebration of richard nelson s 70th birthday held in nyc from 13 15 october 2000 comments welcome

a dictionary for voting paradoxes abstract a sonnenschein mantel debreu kind of characterization is found for positional voting procedures namely for n 2 candidates once the voting procedures and a profile are specified the rankings of all possible subsets of candidates are uniquely determined by varying over all profiles one obtains a dictionary of all possible coordinated election outcomes this is done for all positional voting procedures as with excess demand functions anything can happen voting paradoxes can be very complicated only borda s method avoids many paradoxes use of this dictionary is illustrated by significantly extending several well known paradoxes and by obtaining new results about runoff and agenda elections strategic behavior etc

networks of innovators a synthesis of research issues abstract this paper will first summarise some key findings of empirical research in the 1960s on the role of external sources of scientific technical and market information in successful innovation by business firms this work demonstrated unambiguously the vital importance of external information networks and of collaboration with users during the development of new products and processes moreover the dilemmas of cooperative research in competitive industries were recognised and studied long ago 35 62 76 what then is new about the present wave of interest in networks of innovators are there new forms of organisation or new technologies or new policies which justify renewed research efforts since they go beyond those developments already analysed in earlier empirical and theoretical work section 2 reviews the evidence of new developments in the 1980s in industrial networks regional networks and government sponsored innovative activities it shows that there has indeed been a major upsurge of formal and semi formal flexible networks in the 1980s including some new types of network it also shows that some older forms of research cooperation have been modified and transformed the papers at montreal largely concentrated on the role of regional supplier networks which are a good example of such new wine in old bottles this paper attempts to locate the regional network discussion within a wider context of new developments in networking section 3 discusses the causes of these new developments and whether they are likely to remain a characteristic of national and international innovation systems for a long time to come or prove to be a temporary upsurge to be overtaken later by a wave of take overs and vertical integration finally section 4 sums up some of the other key issues which require further research and debate and the implications for social science theory

uniqueness of equilibrium payoffs in the stochastic model of bargaining abstract i provide a sufficient condition for the uniqueness of equilibrium payoffs in a model of stochastic bargaining with unanimity rule and risk averse players my condition s implies condition c of merlo and wilson 1995 and is easy to verify in applications

interpenetration of organization and market japan s firm and market in comparison with the u s abstract resource allocation mechanisms used in the market and within the firm are quite often a mixture of the pure market principle and the pure organization principle market principles penetrate into the firm s resource allocation and organization principles creep into the market allocation interpenetration occurs to remedy the failure of pure principles other in the market or in the organization after presenting this new perspective we analyze resource allocation mechanisms in japan and the u s one conclusion is that interpenetration patterns are rather different between the two countries due to institutional economic and societal differences we also analyze the ways in which these differences affect japanese and american corporate behavior in such areas as diversification strategy corporate financing and innovation and venture business activity

the problem of indeterminacy in approval multiple and truncated voting systems it is well known that a plurality election need not reflect the true sentiments of the electorate some of the proposed reform procedures such as approval and cumulative voting share the characteristics that there are several ways to tally each voter s preferences voting systems that permit truncated ballots share this feature it is shown that the election results for any such procedure can be highly indeterminate all possible election results can occur with the same choice of sincere voters this conclusion of indeterminacy holds even when measures of voters sentiments such as the existence of a condorcet winner or even much stronger measures indicate there is considerable agreement among the voters then multiple systems are compared with all standard tallying procedures for instance a corollary asserts it is probable for the plurality voting method to elect the condorcet winner while approval voting has an indeterminate outcome

explaining all three alternative voting outcomes abstract a theory is developed to explain all possible three alternative single profile pairwise and positional voting outcomes this includes all preference aggregation paradoxes cycles conflict between the borda and condorcet winners differences among positional outcomes e g the plurality and antiplurality methods and differences among procedures using these outcomes e g runoffs kemeny s rule and copeland s method it is shown how to identify interpret and construct all profiles supporting each paradox among new conclusions it is shown why a standard for the field the condorcet winner is seriously flawed journal of economic literature classification numbers d72 d71

susceptibility to manipulation all positional voting procedures can be manipulated so it is natural to question whether some of these systems are more susceptible to being manipulated than others in this essay this susceptibility factor is measured for strategic action involving small groups it is shown that the system least susceptible to micro manipulations for n 3 candidates is the borda count bc the optimal choice changes with n but the analysis shows that the bc always fares fairly well on the other hand the plurality and anti plurality vote as well as multiple voting systems such as approval voting and cumulative voting always fare quite poorly with respect to susceptibility finally it is shown why it is possible to justify any voting method by choosing an appropriate measure of susceptibility and imposing the appropriate assumptions on the profiles of voters this statement emphasizes the importance of the basic assumptions of neutrality used throughout this essay

business groups in a market economy abstract the purpose of this paper is to examine the nature and significance of the interfirm relationship called the business group first the nature of the japanese business group is discussed it is then pointed out that the business group is not a phenomenon unique to japan and an effort is made to explain the significance of the business group in the context of a market economy using the williamsonian approach to questions of internal organization and the market finally the relationship between the input output relationship of the firms and their group affiliation is tested

analysis of renewable energies in european union abstract the paper s main research objective is to analyse the renewable energy sector in the european union member states the first step of the research was to generate clusters of countries based on the share of renewables in total energy produced and the countries energy dependence in order to generate the clusters we applied the k means clustering method based on the data obtained from eurostat by using the statistical package for the social sciences three clusters of countries have been generated in the next step the eu states were ranked based on the following criteria share of renewable energy sources share of renewable electricity share of renewable heating and cooling and share of renewable energy in transport then the main characteristics of the renewable energy policy in each member state have been highlighted

the politics of compromise abstract an organization must select among competing projects that differ in their payoff consequences for its members each agent chooses a project and exerts effort affecting its completion time when one or more projects are complete the agents select which one to adopt the selection rule for multiple projects that maximizes ex post welfare leads to inefficiently high polarization rules that favor later proposals improve upon ex post optimal selections the optimal degree of favoritism increases in the cost of effort and discount rate this trade off informs the design of process rules in standard setting organizations and helps explain their performance jel c78 d23 d71 d72 d83 l15

implementing the borda outcome via truncated scoring rules a computational study this study is an attempt to empirically understand the likelihood of choosing the borda outcome through a truncated scoring rule when n voters are asked to report only part of their linear preferences over m alternatives we run monte carlo simulations through a grid search algorithm as we employ an impartial culture model to sample voters preferences given the range of parameter values we consider we report the truncated scoring rules that maximize the likelihood of implementing the borda outcome and how the maximum likelihood changes with m and n we also present our results on the relative performances of some popular truncated voting rules such as plurality and approval voting in implementing the borda outcome and demonstrate that two level approval voting performs significantly better than the plurality rule moreover we propose the expected borda rule as a good proxy for the best implementor of the borda rule among all truncated rules

the new patent intermediaries platforms defensive aggregators and super aggregators some assets are traded in liquid markets at transparent prices with the help ome assets are traded in liquid markets at transparent prices with the help of many thriving intermediaries houses and apartments stocks and other of many thriving intermediaries houses and apartments stocks and other fi nancial products books dvds electronics and all sorts of collectibles fi nancial products books dvds electronics and all sorts of collectibles

scanning the commons evidence on the benefits to startups participating in open standards development this paper contributes large sample evidence to an emerging discussion on open innovation and firm strategy we ask why a startup should participate in an open standards community we propose four ways that participation might increase a startup s chances of a liquidity event gaining endorsement of the startup s technology standard openly developing the startup s technology within the community but not necessarily gaining endorsement simply attending physical meetings of the community and having startup members elected to leadership positions examination of venture funded startups in the networking data communications industry sectors reveals that those startups that participate in an open standards community the internet engineering task force ietf have a greater likelihood of an initial public offering or acquisition the strongest effects are due to attendance and conditional on high levels of attendance holding leadership positions within the ietf surprisingly standards endorsement is insignificant when controlling for simple physical attendance these results are robust to instrumental variable methods and alternative coding of variables in two stage models we also find that prominent venture capitalists might help their portfolio companies by steering them to effective technology strategies in this case active participation in the ietf and not simply by lending status

waiting to persuade i analyze a sequential bargaining model in which players are optimistic about their bargaining power measured as the probability of making offers but learn as they play the game i show that there exists a uniquely predetermined settlement date such that in equilibrium the players always reach an agreement at that date but never reach one before it given any discount rate if the learning is sufficiently slow the players agree immediately i show that for any speed of learning the agreement is delayed arbitrarily long provided that the players are sufficiently patient therefore although excessive optimism alone cannot cause delay it can cause long delays if the players are expected to learn

conversation with secrets we analyze the sustainability of a conversation when one agent might be endowed with a piece of private information that affects the payoff distribution to its benefit such a secret can compromise the sustainability of conversation even without an obligation the secret holder will disclose its secret if it prevents preemptive termination of the conversation the nonsecret holder lacks this possibility and stops the conversation competition and limited effectiveness of the conversation amplify this result of early disclosure and render the conversation process less sustainable we discuss policy and managerial implications for industry standard development and joint ventures

standard setting organisations and standard essential patents voting and markets the analysis provides conditions under which standard setting organisations ssos choose efficient technology standards i introduce a two stage game with both voting and market competition in equilibrium standards and market outcomes are efficient even with market power from scarce capacity and standard essential patents seps i show that a drastic innovation with seps generates greater social welfare than a less efficient standard without seps a key finding is that voting power and market power have counterbalancing effects the discussion helps explain empirical observation of differences in sso voting rules intellectual property ip rules membership and alliances

the evolution of university industry government relationships during transition abstract this paper deals with the transformation of relationships between business and universities as reflected in government programmes and in the innovation activities of firms in a transition economy hungary the paper examines how government facilitates partnership between university and industry and how companies relate to universities its empirical basis is four pilot innovation surveys together with research and development statistics employing innovation surveys in an investigation of university business collaboration allows us to identify how strong a factor is the influence of universities in a given system the new government programmes tend to encourage closer links between public sector research and private sector expectations casual observations have shown that an innovation network can be created and exist if business firms are hungry for innovation hungarian business which is barely innovative or which is mainly involved in moderate innovation is still able to create limited research tasks mainly in experimental development and design in trials and in the tooling up process government programmes are moving in the right direction when they promote interaction in a national system of innovation however such interaction is still limited in the move towards a knowledge or learning based economy

cooperating with competitors patent pooling and choice of a new standard abstract i examine the efficiency of patent pooling in a setting that allows for the interplay between the standards process in which owners of essential intellectual property ip develop a new product and the subsequent pooling decision in which ip prices are coordinated if one of the ip owners is also the incumbent of a product that employs the current competing standard referred to as overlapping ownership then the relationship among the ip owners will be both vertical through their ip and horizontal through their competing interests in the final products consumers are better off when ip owners cooperate even when these owners are effectively competitors because of lower prices and greater product variety consumers prefer however that the agreements not admit firms with overlapping ownership these results inform antitrust policy on cooperative agreements among competitors

standards consortia and innovation the development of formal ict standards is a challenging form of collaborative innovation combining consensus decision making and r d rivalry to supplement this formal standard setting process it has thus become frequent that part of the involved firms creates ad hoc consortia to better align positions on a common technology roadmap this paper aims to assess whether such consortia can effectively mitigate r d coordination failure through enhanced cooperation we first develop a theoretical model showing that depending on the nature of firms incentives to contribute proprietary technology different types of r d coordination failure namely a public good or rent seeking problem may occur in equilibrium using a large panel of standards we then confirm empirically the prediction that consortia have different effects on innovation under a public good or rent seeking regime overall we observe an increase in innovation after a firm joined a consortium however this effect is significantly weakened or even reversed for standards characterized by a strong rent seeking regime

ameliorating majority decisiveness through expression of preference intensity in pairwise voting when a simple majority rule produces a winner that winner is robust to the minority s preferences the typical means of protecting the minority from the decisiveness of the majority is by increasing the required majority or by augmenting the simple majority rule with constitutional constraints in the former case the required majority q becomes larger than one half and this implies that the q majority rule becomes biased in favor of one of the alternatives usually the status quo in the latter case the augmented rule becomes biased in favor of the minority the main issue examined in this paper is whether the amelioration of majority decisiveness can be attained by unbiased voting rules that allow some restricted expression of preference intensities our results clarify that the use of scoring rules provides a positive answer to the above question when voters resort to variable degrees of coordinated strategic voting the results are illustrated in the special cases of the plurality and the borda rules

the secrets of industry are in the air industrial cooperation and the organizational dynamics of the innovative firm abstract the purpose of this exploratory work is to contribute to the elaboration of an analytical framework appropriate to the study of the organizational forms involved in technological cooperation the approach used herein is one of formulating those properties of the process of integration and association of resources that are not based on the economics of transaction costs these properties suggest that the integration and the association of resources are necessary for the creation of technology but are also a source of irreversibility after having defined the concept of organizational balance of innovative firms which corresponds to the possibility of reconciling specific resources with the reversibility of technological capacity i will attempt to show that the forms of cooperation as much intra as inter firm constitute the basic principle of organization and functioning of innovative firms i shall be able thus to give a positive reading of technological cooperation on the basis of an economic analysis of organization

technological competition and the structure of the computer industry we examine thirty years of computer industry market structure our analysis explains the persistence of dominant computer firms their recent decline and the changing success of competitive entry it emphasizes the importance of technological competition between computer platforms not firms this aspect of competition has changed little over time two things did change young platforms serving newly founded segments eventually challenged established platforms across segment boundaries through a process of indirect entry vertically disintegrated platforms have led to divided technical leadership in important segments the result is an industry with far more technological competition

large firms in the production of the world s technology an important case of non globalisation us patenting by 686 of the world s largest manufacturing firms shows that their share of the world s production of technology is less than their share of r d activities and varies greatly amongst sectors in most cases the technological activities of these large firms are concentrated in their home country the characteristics of which influence the volume and trends in their technological activities much more strongly then the international component of these activities at the same time these large firms are major elements in the volume and the pattern of sectoral specializations in their home countries technological activities

the responsiveness of approval voting comments on saari and van newenhizen saari and van newenhizen 1987 misinterpret their findings about the indeterminacy of voting systems far from being a vice indeterminacy is a virtue in allowing voters to be more responsive to and robbing them of the incentive to misrepresent their preferences the responsiveness of approval voting in particular means that the cardinal utilities that voters have for candidates can be reflected in voters strategy choices which ultimately translate into better social choices empirical data from a recent election support these claims showing among other things that the borda system a determinate voting system favored by saari and van newenhizen is highly vulnerable to manipulation by strategic voters

perfect equilibria in a negotiation model rubinstein s alternating offers bargaining model is enriched by assuming that players payoffs in disagreement periods are determined by a normal form game it is shown that such a model can have multiple perfect equilibria including inefficient ones provided that players are sufficiently patient delay is possible even though there is perfect information and the players are fully rational the length of delay depends only on the payoff structure of the disagreement game and not on the discount factor not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs indeed some negotiation games have a unique perfect equilibrium with immediate agreement

the division of labor coordination costs and knowledge this paper considers specialization and the division of labor a more extensive division of labor raises productivity because returns to the time spent on tasks are usually greater to workers who concentrate on a narrower range of skills the traditional discussion of the division of labor emphasizes the limitations to specialization imposed by the extent of the market we claim that the degree of specialization is more often determined by other considerations especially emphasized are various costs of coordinating specialized workers who perform complementary tasks and the amount of general knowledge available