cooperative and noncooperative r d in duopoly with spillovers contrary to the usual assumption made in most oligopoly models relations among firms are seldom of a wholly cooperative or noncooperative type in many situations they compete in some fields while they cooperate in others an important example is the case of cooperative research efforts bringing fierce competitors together two types of agreement are observed first r d cooperation can take place at the so called precompetitive stage companies share basic information and efforts in the r d stage but remain rivals in the market place 1 a second type of agreement involves an extended collusion between partners creating common policies at the product level the usual justifications of this extension are the difficulties of protecting intellectual property the idea is then to allow partners who have achieved inventions together to also control together the processes and products which embody the results of their collaboration in order to recuperate jointly their r d investments 2 what could be expected from these types of agreement is a reduction in r d expenditures because of less wasteful duplication and a reduction of total production because of more reprinted from the american economic review 78 5 1133 1137 1988 center for operations research econometrics 1348 louvain la neuve belgium we are grateful to jean

on the role of input and output spillovers when r d projects are risky abstract this paper analyzes the impact of input and output spillovers on the expected effective cost reductions in a two stage model of r d where all r d projects are risky it is shown that relative to the deterministic case output spillovers tend to reduce expected cost reductions whereas input spillovers tend to increase investment in r d and hence expected cost reductions in particular the relations between cost reductions in the presence of input and output spillovers known from deterministic models may be reversed under certain parameter constellations

intergenerational linkages in consumption behavior consumption is partly a social activity yet most studies of consumer behavior treat households in isolation we investigate familial relationships in consumption patterns using a sample of parents and their children from the panel study of income dynamics we nd a positive and statistically signi cant parent speci c eect on children s consumption even after controlling for the eect of parental income and we nd similar eects for sibling pairs child consumption responds negatively to large post retirement shortfalls in consumption of the parents this behavior holds up even after allowing for the possibility of smaller parent to child transfers made necessary by the parental consumption shortfalls these results suggest that although income is an important source of the intergenerational correlation parental choices and experiences also aect consumption behavior of the children

socially responsible investments among parents and adult children novel evidence is provided of a positive correlation between parents and their children s socially responsible mutual fund investment behavior although captured parent child correlations reflect

a theory of impact philanthropy this article develops a new model of altruism called impact philanthropy an impact philanthropist is someone who wants to personally make a difference while that motive is straightforward its logical implications are significantly different from other models of philanthropy for example the contributions of other donors can reduce an impact philanthropist s charitable fulfillment as a result cooperation among impact philanthropists can reduce aggregate giving in addition impact philanthropy can lead to a codependent relationship between givers and receivers in which both benefit from the other finally the model suggests a conflict between charitable organizations and its donors concerning the allocation of charitable gifts in particular a charitable organization prefers to spread a donor s contribution across many goods whereas a donor prefers to target his or her contribution at a specific good d 2003 elsevier b v all rights reserved

cooperative and noncooperative r d in an oligopoly with spillovers this paper examines the positive and normative effects of cooperative r d whereby member firms commit themselves to the joint profit maximizing level of r d in a precompetitive stage but remain fierce competitors in the product market vis a vis noncooperative r d socially first best r d and socially second best r d in the presence of sufficiently large r d spillovers neither noncooperative nor cooperative equilibria achieve even second best r d levels in the absence of spillover effects however while the cooperative r d level remains socially insufficient the noncooperative level may overshoot first and second best levels of r d copyright 1992 by american economic association

on additive spillovers and returns to scale in r d abstract this paper explores economically meaningful forms of cost functions for process research and development in the presence of imperfect appropriability of inventive output we propose as a central criterion to be satisfied by the knowledge production process that a given r d investment should always produce more cost reduction if devoted to one lab rather than two independent labs operated under natural spillovers with input spillovers this postulate is broadly satisfied however with output spillovers this is generally not the case for r d technologies having decreasing returns to scale we identify economically plausible restrictions on the size of spillovers and on the properties of the r d cost function so as to bring about compatibility with the above postulate some empirical evidence in support of both the criterion and of its theoretical implications is discussed

cooperation between rivals informal know how trading it has long been recognized that it is difficult for an innovating firm to fully appropriate the benefits arising from its innovations and that desired research might therefore not be performed nelson 1959 pp 297 306 one sometimes possible solution to this dilemma is cooperative r d conducted by firms who share the costs and benefits of particular r d projects johnson 1973

modelling imperfectly appropriable r d via spillovers abstract we provide an extensive comparison of the well known r d models of d aspremont jacquemin and kamien muller zang exposing full or partial conflict in key conclusions and policy prescriptions using a mix of formal and or intuitive criteria we argue that the first model is of questionable validity for large spillover values the latter being characterized by jointly increasing returns to scale in the r d process an argument leading to equivalence between the two r d processes but not to agreement on some key conclusions is exposited in conclusion the models emerge as fundamentally different although a unilateral shift in the cost function of the first leads to agreement in all equilibrium outcomes

semiparametric censored regression models aregression model is censored when the recorded data on the dependent variable cuts off outside a certain range with multiple observations at the endpoints of that range when the data are censored variation in the observed dependent variable will understate the effect of the regressors on the true dependent variable as a result standard ordinary least squares regression using censored data will typically result in coefficient estimates that are biased toward zero traditional statistical analysis uses maximum likelihood or related procedures to deal with the problem of censored data however the validity of such methods requires correct specification of the error distribution which can be problematic in practice in the past two decades a number of semiparametric alternatives for dealing with censored data have been proposed in a semiparametric approach part of the functional form of the model usually the regression function is parametrically specified by the researcher based upon plausible assumptions while the rest of the model is not parameterized 1 while the theoretical literature has produced several semiparametric estimators for the censored data model published applications of these estimators to empirical problems in economics have lagged far behind this paper reviews the intuition and computation of a handful of semiparametric estimators proposed for the censored regression model the various estimators are used to examine changes in black white earnings inequality during the

the intergenerational transmission of risk and trust attitudes recent theories endogenize the attitude endowments of individuals assuming that they are shaped by the attitudes of parents and other role models this paper tests empirically for the relevance of three aspects of the attitude transmission process highlighted in this theoretical literature 1 transmission of attitudes from parents to children 2 an impact of prevailing attitudes in the local environment on child attitudes and 3 positive assortative mating of parents which enhances the ability of a parent to pass on his or her attitudes to the child we focus on two fundamentally important attitudes willingness to take risks and willingness to trust others we find empirical support for all three aspects providing an empirical underpinning for the literature an investigation of underlying mechanisms shows that socialization is important in the transmission process various parental characteristics and aspects of family structure are found to strengthen the socialization process with implications for modeling the socialization production function and for policies focused on affecting children s non cognitive skills the paper also provides evidence that the transmission of risk and trust attitudes affects a wide variety of child outcomes implying a potentially large total effect on children s economic situation

a superior measure of consumption from the panel study of income dynamics abstract this paper provides a simple technique for assigning a measure of total consumption to households in the panel study of income dynamics psid using regressions from the consumer expenditure surveys of 1972 1973 and 1983 linear predictions of total consumption are estimated which are stable over time and explain up to 78 percent of the total variance in consumption

adaptation and international environmental agreements we study the impact of collective effort in r d in adaptation technologies and also spillover effects on formation and size of stable international environmental agreements ieas our results suggest that it is possible to have more than one size of stable iea we can achieve a superior equilibrium i e the grand coalition if countries manage to keep knowledge spillovers low and arrange a minimum ratification threshold this threshold is defined endogenously we also shed light on the effects of two sided spillover on global welfare and the size of stable ieas

the charity of the extremely wealthy our experience worldwide is that first generation wealth is actually more generous than dynastic wealth both here in india and u s and other countries the biggest givers are those who are receivers of first generation wealth bill gates quoted in thakur lee and frye 2011 i introduction in this article we study the charitable behavior of billionaires focusing on the impact of the source of their wealth on their charitable donations and pledges while billionaires play a leading role in both the economy and in philanthropy and they are watched closely by journalists and the public at large econometric studies that focus on the behavior of billionaires are rare 1 understanding the charitable behavior of the extremely wealthy is important because they are responsible for a disproportional share of overall giving directly through the amounts of money they give and also because their public status makes their behavior an example for others to follow while the determinants of individual giving have already been studied in experimental settings and using surveys reinstein and riener 2012 steinberg et al 2011 this article documents charitable behavior of a larger magnitude than that typically studied in experiments and of people who do not participate in experiments or fill out surveys 2 our analysis focuses on the question of whether self made billionaires are more charitable than billionaires who inherited their money as bill gates suggested in the quote above it is well documented that people s decisions on how to spend money often depend on how they received that money epley mak and chen idson 2006 for example show that the propensity to consume is bigger if income received is framed as a bonus rather than a rebate arkes et al 1994 show that windfall gains are more readily consumed than nonwindfall gains such evidence has been found both inside and outside the laboratory but in this article we investigate whether treatment of income varies depending on its source when the amounts at stake are much larger than previously studied in the literature in this article amounts range from millions to billions of dollars in comparison with the tens or hundreds of dollars in experimental literature or the tens of thousands of dollars studied in the research on decisions in every day life moreover studies that investigate how spending varies with the source of money typically conclude that earned income is spent more carefully than windfall gains however in the case of charitable giving self made money seems to be more rather than less likely to be spent on charity than inherited money steinberg et al 2011 indeed show using data from the charitable giving module of the panel study of income dynamics psid that the presence of inherited wealth increases giving but also that income held constant an increase in the proportion of income coming from an inheritance is associated with a decrease in charitable giving 3 to study the charitable behavior of the extremely wealthy we use data from the giving pledge a global public pledge to give away at least half of one s fortune during one s lifetime http givingpledge org which by now has been signed by more than 100 extremely wealthy people typically current billionaires in addition we use data on the presence of u s billionaires in the philanthropy top 50 and in the million dollar list a list of those who have given grants of 1 million or more since 2000 we find evidence that self made billionaires are three to four times more likely to sign the giving pledge and to enter the philanthropy top 50 list of biggest pledges compared with those who inherited their wealth at the same time we find that the gap in probabilities between self made and inherited wealth is much smaller at about 28 when looking at the presence in the million dollar list we also find that self made billionaires give more on average than inherited billionaires do when measuring total gifts using the million dollar list or the philanthropy top 50

the intergenerational transmission of generosity abstract this paper estimates the correlation between the generosity of parents and the generosity of their adult children using regression models of adult children s charitable giving new charitable giving data are collected in the panel study of income dynamics and used to estimate the regression models the regression models are estimated using a wide variety of techniques and specification tests and the strength of the intergenerational giving correlations is compared with intergenerational correlations in income wealth and consumption expenditure from the same sample using the same set of controls we find the religious giving of parents and children to be strongly correlated as strongly correlated as are their income and wealth the correlation in the secular giving e g giving to the united way educational institutions for poverty relief of parents and children is smaller similar in magnitude to the intergenerational correlation in consumption parents religious giving is positively associated with children s secular giving but in a more limited sense overall the results are consistent with generosity emerging at least in part from the influence of parental charitable behavior in contrast to intergenerational models in which parental generosity towards their children can undo government transfer policy ricardian equivalence these results suggest that parental generosity towards charitable organizations might reinforce government policies such as tax incentives aimed at encouraging voluntary transfers

estimation of semiparametric censored regression models an application to changes in black white earnings inequality during the 1960s building on the work of chay 1995 this study examines the impact of civil rights policies on black economic progress using individual level panel data many earnings records are censored and the degree of censoring changed during the period of interest consequently valid estimates of the program effects must account for this censoring maximum likelihood estimation can be used if the error terms of the model are identically normally distributed we investigate the value of using weaker assumptions on the error process to estimate the laws impact the analysis shows that there was significant black white earnings convergence in the south during the 1960s we also find that semiparametric estimation methods are informative in pinpointing which parts of the model are mis specified

dynamics in research joint ventures and r d collaborations abstract we investigate the short and long term effects of different types of r d collaborations on firms consumers and the industry to that end we consider a differentiated product market in which firms compete a la bertrand and invest in process innovation in order to lower the production cost over time investments are stochastic and there can be cartelization or competition strategies among firms at the moment of making the decision on the amount to invest in r d our results show that in equilibrium the long run welfare is larger under a research joint venture than under other environments discounted present value profits increase with the level of the spillover but there are asymmetries that depend on the firms asymmetry on marginal costs

domestic liquidity and cross listing in the united states abstract this study examines changes in domestic liquidity after cross listing in the united states our liquidity measures are based on intraday data from domestic markets for a large sample of firms that cross list in the united states and for a matched sample of firms that do not cross list we find that unadjusted liquidity significantly improves after cross listing however after controlling for contemporaneous changes in liquidity for a matched sample of firms that do not cross list there is no evidence of improvements in domestic liquidity due to cross listing our results offer no support for the bonding hypothesis or for the hypothesis that cross listing improves domestic liquidity because of increased intermarket competition and additional order flow

inter firm complementarities in r d a re examination of the relative performance of joint ventures we compare duopoly outcomes between two alternative modes of research and development rd the reverse holds for high spillovers when rjvs yield higher technological improvement they also yield higher industry profit and social welfare

absorptive capacity coauthoring behavior and the organization of research in drug discovery we examine the interface between for profit and publicly funded research in pharmaceuticals firms access upstream basic research through investments in absorptive capacity in the form of in house basic research and pro publication internal incentives some firms also maintain extensive connections to the wider scientific community which we measure using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers connectedness is significantly correlated with firms internal organization as well as their performance in drug discovery the estimated impact of connectedness on private research productivity implies a substantial return to public investments in basic research

absorptive capacity and connectedness why competing firms also adopt identical r d approaches abstract this paper explores the endogenous determination of r d appropriability through the firms choice of r d approaches whereas identical broad r d approaches connect firms with their r d environment and maximize absorptive capacities the opposite holds for idiosyncratic r d approaches our model shows that competing firms choose identical r d approaches in order to maximize knowledge flows between each other in essence this frees firms from the prisoner s dilemma of aggressive investment in r d our analysis contrasts with kamien and zang s 2000 kamien m zang i 2000 meet me halfway research joint ventures and absorptive capacity international journal of industrial organization 18 995 1012 finding that competing firms chose idiosyncratic r d approaches we demonstrate that their model also yields a nash equilibrium for broad identical r d approaches

when is inter firm coordination beneficial the case of innovation abstract we are used to the idea that collusion among firms is legitimately presumed to be damaging to the public interest and that the antitrust authorities are fully justified in taking coordination of prices to merit prohibition per se as inexcusable in any circumstances one reaches that conclusion when one thinks about price as the matter being decided upon and when the coordinating parties are horizontal competitors but as those who have studied the issue know joint decisions can in some general cases materially promote the public interest if those decisions deal with matters other than price even coordination of prices can be desirable if the firms involved are vertically rather than horizontally related indeed this is widely recognized by antitrust authorities who for example take a more favorable view of vertical coordination than of horizontal coordination and have frequently avoided interference in research joint ventures the central point of this paper is that with important exceptions coordination on innovation and on the supply of proprietary technical information to competitors can be highly beneficial to the economy enhancing both its static efficiency and its growth the policy implication is that regulatory agencies and the courts should exercise extreme restraint in interfering with such joint decision making though they should maintain some degree of vigilance to ensure that it does not transform itself into anti competitive behavior that profits at the consumer s expense

r d spillovers and information exchange abstract we show that the spillover of r d can be endogenised in a sense that even without spillovers firms have an incentive to exchange the r d information after the investment costs are sunk

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate