the case against intellectual property according to a common argument the presence of strong intellectualproperty rights spurs innovation which leads to higher economic growthand increasing benefits for all the argument seems coherent theestablishment of secure property rights is a fundamental pillar of a wellfunctioning market economy no economic agent exercises productiveeffort without the certainty of controlling its fruits what is true forphysical effort must be true for the intellectual one if strong propertyrights provide good incentives for the production of potatoes they mustalso provide good incentives for the production of ideas why then do we argue a case against intellectual property are wearguing that while stealing potatoes is bad stealing ideas is good weare not economic efficiency and common sense argue that ideasshould be protected and available for sale just like any other commodity but intellectual property has come to mean not only the right to ownand sell ideas but also the right to regulate their use this creates asocially inefficient monopoly and what is commonly called intellectualproperty might be better called intellectual monopoly when you buy apotato you can eat it throw it away plant it or make it into a sculpture current law allows producers of a cds and books to take this freedomaway from you when you buy a potato you can use the idea of a potatoembodied in it to make better potatoes or to invent french fries currentlaw allows producers of computer software or medical drugs to take thisfreedom away from you it is against this distorted extension ofintellectual property rights that we argue it is a long jump from the assertion that inventors deserve the fruits oftheir efforts to the conclusion that current patent and copyrightprotection are the best way of providing such reward statements such

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

optimal debt endogenous fertility and human capital externalities in a model with altruistic bequests abstract this paper explores optimal debt in a model with altruistic bequests endogenous fertility and human capital externalities because of such externalities education investment is too low and fertility is too high while education subsidies are the conventional means to deal with these problems we show that the optimal policy also comprises debt even when distortionary taxes are used the reason is that debt tips the usual trade off between children s quantity and quality in favor of the latter by increasing the bequest cost of children the optimal debt output ratio exceeds 10 for plausible parameterization

firm size and r d intensity a re examination using data from the federal trade commission s line of business program and survey measures of technological opportunity and appropriability conditions this paper finds that overall firm size has a very small statistically insignificant effect on business unit r d intensity when either fixed industry effects or measured industry characteristics are taken into account business unit size has no effect on the r d intensity of business units that perform r d but it affects the probability of conducting r d business unit and firm size jointly explain less than one per cent of the variance in r d industry effects explain nearly half the variance two sets of well known hypotheses are associated with the later work of joseph schumpeter the first concerns the effects of market concentration on research and development investment and on innovative performance the second bears on the effects of firm size on r d and innovation in a recent paper levin cohen and mowery 1985 we re examined the first set of hypotheses simple regressions at the line of business level replicated the established findings that both r d intensity and innovative performance first increase and then decrease as industrial concentration rises the effect of concentration however was sharply attenuated when we controlled for interindustry differences in technological opportunity and in the appropriability of returns from new technology our results suggested that it is probably unwarranted to conclude that market concentration favors r d investment and innovation in this paper we investigate the schumpeterian hypothesis that large size is conducive to r d investment this relationship has been studied at least as intensively as the link between concentration and r d but our approach is novel in two respects first using data collected by the federal trade

the quest for evidence on the economic effects of copyright law the requirement by the uk government for evidence based policy has recently been applied to copyright law in the context of i hargreaves s report digital opportunity review of intellectual property and growth newport intellectual property office 2011 in this article i focus on data that have been used to make the case for copyright with government but it is argued that this does not produce the evidence that is needed for policy purposes the problem facing economists in providing such evidence is discussed in detail in connection with hargreaves proposal for a digital copyright exchange copyright oxford university press

getting out the vote participation in gubernatorial elections scholarship on electoral turnout has long emphasized two main themes explanations of nonvoting in terms of individual characteristics and in terms of contextual variables these investigations have deeply enriched our understanding of electoral participation but their limitations have also sensitized us to the remaining problems of explanation perusal of the work on american politics exposes a rather striking tendency in studies of participation to ignore or soft pedal the effects of active political mobilization in this article we formulate two models of electoral turnout socioeconomic and political mobilization and apply them to aggregate data on voting in gubernatorial elections of 1978 and 1980 the socioeconomic model of turnout includes such influences as income age and educational attainment to assess the effects of political mobilization we have considered campaign spending partisan competition electoral margin and the presence or absence of a simultaneous race for the united states senate both of the models perform quite well individually producing significant and meaningful coefficients and adequate fits yet in the final analysis we demonstrate that quite apart from major sources of variation in gubernatorial turnout such as region and presidential versus nonpresidential years the mobilizing influences of campaign activism and competitiveness have a strong impact on electoral participation electoral law i e closing date of registration retains a small but significant effect on voting for governor and socioeconomic characteristics included in a fully specified model have little to contribute independently to an explanation of electoral turnout these findings are very much in the same vein as related cross national investigations which emphasize the crucial role of electoral law and political parties and downplay individual characteristics as determinants of electoral participation on the basis of the research reported here we argue that scholars need to pay more attention to political mobilization as an explanation of electoral turnout in the presidential election between cox and harding in 1920 only half of the eligible voters participated this relatively low turnout together with the historically minimal rates of participation in state and local elections created deep concern among those who believed that reasonably high levels of political involvement are crucial in maintaining a healthy democratic politics it was in this atmosphere of worry about low electoral turnout that charles e merriam and harold f gosnell 1924 conducted in the city of chicago the first systematic study of nonvoting subsequently gosnell 1927 went even further and executed the first experimental study in modern political science demonstrating conditions that could stimulate electoral turnout we too worry about low participation in elections today at every level of government and we believe these classic studies

household borrowing constraints fertility dynamics and economic growth abstract in this article we provide a model of growth with endogenous fertility in which multiple steady states derive from the modelling of household liquidity constraints we put forward an innovative approach to the finance of higher education by assuming that youths can borrow because their parents guarantee the loan repayment with their income young individuals can renege on their debt and lenders provide them credit only up to an amount which is commensurate to a collateral provided to children by their families parents care about children s education and choose a collateral which depends positively on family income and negatively on family size a stable trap of low development is characterized by high fertility rates and low investment in human capital on the other hand in economies with a sufficiently low starting rate of fertility borrowing constraints gradually vanish and the process of growth reaches a steady state characterized by the optimality of fertility and schooling choices government subsidies to education may reduce population growth and promote human capital investment if fertility at steady states is lower than thresholds

the logic of appropriability from schumpeter to arrow to teece this note expounds the abstract fundamentals of the appropriability problem re assessing insights from three classic contributions those of schumpeter arrow and teece whereas the first two contributions were explicitly concerned with the implications of appropriability for society at large teece s main concern was with practical questions of business strategy and economic organization this note argues that his practical concerns notwithstanding teece contributed en passant but fundamentally to the clarification of basic questions that previous authors had addressed less comprehensively and less satisfactorily specifically his analysis of the innovator s access to complementary assets undertaken from a contracting perspective can be seen as filling a significant gap in the previous theoretical discussion of appropriability 2006 published by elsevier b v

quality change in price indexes price indexes provide the fundamental building blocks for measuring the general price level along with real incomes and real output but the most important single price index for the united states the cpi has been criticized as significantly underestimating the pace of quality change this paper sketches the issues involved in the measurement of quality change in price indexes it reviews the theory of quality change discusses how the bureau of labor statistics deals with quality change and provides examples of measurement issues in practice it concludes with a proposal to resolve the massive uncertainties in this area

on the nexus of fertility and debt abstract this paper examines the effects of debt on fertility with panel data the baseline model confirms that both public and non financial private debt significantly mitigate fertility whereas the dynamic panel suggests that only the effects of private debt are significant

reflections of david teece s profiting from technological innovation abstract this paper builds on teece s 1986 paper to consider how appropriability conditions affect the ability of an industry and the economy as a whole to progress in particular it offers a careful discussion of the broader costs and benefits of patenting can too much appropriability actually work against the broader interests of society in fostering economic growth and technical advance in the market

how much should society fuel the greed of innovators on the relations between appropriability opportunities and rates of innovation the paper attempts a critical assessment of both the theory and the empirical evidence on the role of appropriability and in particular of intellectual property rights iprs as incentives for technological innovation we start with a critical discussion of the standard justification of the attribution of ipr in terms of market failures in knowledge generation such an approach we argue misses important features of technological knowledge and also neglects the importance of non market institutions in the innovation process next we examine the recent changes in the ipr regimes and their influence upon both rates of patenting and underlying rates of innovation the evidence broadly suggests that first iprs are not the most important device apt to profit from innovation and second they have at best no impact or possibly even a negative impact on the underlying rates of innovation rather we argue technology and industry specific patterns of innovation are primarily driven by the opportunities associated with each technological paradigm conversely firm specific abilities to seize them and profit from innovation depend partly on adequacy of the strategic combinations identified by the taxonomy of teece d 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 285 305 and partly on idiosyncratic capabilities embodied in the various firms

persistence of leadership in product innovation in a firm model of vertical product differentiation three distinct patterns of market shares emerge as an equilibrium outcome reflecting three distinct strategies in respect of timing of the introduction of new products the main novelty relative to the existing literature on vertical product differentiation lies in the incorporation of learning by doing this assumption generates stability of market share patterns over a sequence of product innovations copyright 1992 by blackwell publishing ltd

industry effects and appropriability measures in the stock market s valuation of r d and patents this paper examines the stock market s valuation of a firm s innovative activity we estimate the market s relative valuation of firms tangible and intangible assets focusing on knowledge capital in the form of accumulated stocks of r d and patents we tried to improve upon our estimates of the stock market s valuation of knowledge capital embodied in such stocks by bringing in measures of the appropriability environment facing a firm from the yale survey on industrial research and development the responses to survey questions about the effectiveness of patents as a mechanism for protecting the returns from innovation turn out to be of some use there is evidence of an interaction between industry level measures of the effectiveness of patents and the market s valuation of a firm s past r d and patenting performance as well as its current r d moves we find no evidence however that other appropriability mechanisms differ enough across industries to leave measurable traces in our data the structure of the yale survey makes it possible to estimate the sampling error in the appropriability measures derived from it this information was used by us in an errors in variables context but with little success in the absence of r d variables our estimates imply that a two standard deviation increase in our index of patent effectiveness would raise the value of a patent held by our average firm from 0 4 million to 1 0 million when r d variables are introduced into the equations the patents variables become insignificant r d expenditures are a better measure of input to the innovative function of firms than patents are of its output but we estimate that the same experiment would induce changes in q of between 10 and 27 percent for the average firm approximately doubling the market s valuation of this kind of capital this abstract was borrowed from another version of this item

the economics of copyright the copyright industries such as music film software and publishing occupy a significant and growing share of economic activity current copyright law protects the creator for up to 70 years after their death significantly longer than patent protection 20 years after invention copyright law aims to balance the incentive to create new work against the costs associated with high prices and restricted access to this work this paper reviews the economic issues behind copyright and how these are challenged by changes in technology and market structure while economics provides a powerful conceptual framework for understanding the trade offs involved the paper argues that our empirical knowledge base is very weak much more empirical analysis is needed to understand the impacts of changes to copyright legislation without such analysis policy and legal debates will continue to be based largely on anecdote and rhetoric

residential mobility and voter turnout we examine the characteristics of a largely ignored low turnout group people who have recently moved we find that neither demographic nor attitudinal attributes explain their lower turnout instead the requirement that citizens must register anew after each change in residence constitutes the key stumbling block in the trip to the polls since nearly one third of the nation moves every two years moving has a large impact on national turnout rates we offer a proposal to reduce the effect of residential mobility on turnout and estimate that turnout would increase by nine percentage points if the impact of moving could be removed the partisan consequences of such a change would be marginal

the assessment the twentieth century achievements failures lessons the past century saw unprecedented rises in life expectancy and living standards it also witnessed major structural changes the rise of big government and two globalizations yet the century s economic history was marred by policy and market failures resulting in a massive world wide depression frequent financial crises particularly in the developing world and several inflation spurts central planning set back development for one third of the world s population transition to the market economy was at best slow in some instances disastrous income distribution within countries changed little while productivity convergence between rich and poor economies was virtually absent policy making learnt some lessons from the 1930s experience particularly in the areas of macroeconomic management international cooperation and free trade dogmatic recipes however were often resorted to at home aided and abetted by the pretensions of the economics profession

patents and patent policy a patent is the legal right of an inventor to exclude others from making or using a particular invention this right is sometimes termed an intellectual property right and is viewed as an incentive for innovation this article surveys the evidence on patent effectiveness in encouraging innovation and reviews the current controversies in patent policy

the value of intellectual property rights to firms and society economists view intellectual property rights iprs as policy tools for encouraging innovation but they recognize that they can also inhibit competition there are many types of iprs and institutions concerned with their administration we begin by outlining how these complex and varied rights are supposed to work and how they interact with other characteristics of firms and markets we then survey the available literature on patents trade marks and copyright to assess the value of these iprs to firms and the costs to firms of acquiring and defending their rights the paper concludes with suggestions for topics requiring further research to inform public policy better

to protect or not to protect modes of appropriability in the small enterprise sector abstract what appropriation strategies are chosen by innovative small firms a cluster analysis of data from the german cis was carried out to indentify four distinct modes of appropriability in the small enterprise sector the results show that for many innovative small firms the key question is not whether to use intellectual property rights iprs or not but whether to protect their innovations from imitation at all furthermore formal and informal innovation protection mechanisms should not be seen as mutually exclusive since several are employed jointly secrecy and lead time advantages over competitors are often combined with iprs yet a number of small firms use complexity of design as a substitute to patent protection the relevance of each appropriation mode depends on such factors as the degree of innovativeness the type of innovator and the general market environment which implies that the importance of iprs is limited to specific business contexts furthermore regarding firm performance as measured by innovation effects some evidence is found that choosing both ipr and non ipr oriented appropriation strategies can prove to be effective in achieving company goals taken all together the study implies that the use of iprs by innovative small firms is highly selective the paper concludes with a discussion of the implications for policy and research

market value r d and patents abstract a significant relationship is found between the market value of the firm and its intangible capital proxied by past r d expenditures and the number of patents based on a time series cross section analysis of data for large u s firms

court decisions and equity markets estimating the value of copyright protection abstract we construct a database of u s federal court decisions pertaining to copyright and changes in federal statutory copyright law and use this database to assemble indices measuring changes in the breadth of copyright protection we combine our indices with information on excess returns to equity from a quarterly panel of firms and estimate how the breadth of copyright affects the market valuation of firm equity a typical statute that increases copyright breadth generates an increase in a firm s excess return to equity of 40 209 basis points depending on the exact time frame the size of the firm and the importance of the change in statutory law a typical high court decision expanding copyright generates a 13 105 basis point increase in excess returns our results are robust across 4 5 year subsamples and the size distribution of firms our statutory findings are strongest in the most recent portion of the sample

estimates of the value of patent rights in european countries during the post 1950 period this paper examines the distribution of the values of patent rights in the united kingdom france and germany during the post 1950 period these values are inferred from the behavior of patentees with respect to payment of renewal fees on their patents a simple economic model of renewal decisions is combined with data on the proportion of patents renewed at alternative ages and the renewal fee schedules to produce estimates of the distribution and the total value of patent rights in these countries moreover the data indicate that there have been changes in the value distribution and we follow these changes over the period the empirical results of particular interest concern the total value of patent rights and the relationship between changes in it and changes in the quantity of patents the skew in the distribution of patent values and the rate of obsolescence on the returns to patents

simple explanations of turnout decline several recent studies have claimed to explain the post 1960 decline in u s presidential and congressional election turnout in terms of just a few variables abramson and aldrich 1982 attribute the great bulk of the decline to aggregate declines in partisanship and political efficacy shaffer 1981 attributes still more of the decline to aggregate decreases in these same two variables plus age and following the campaign in the newspapers and kleppner 1982 attributes virtually all of the decline to aggregate decreases in the first three of these variables we show how these studies measure explanation too generously and how the very short handedness of their models makes them seem more successful than they are these few variables we conclude leave most of the decline unexplained

intellectual property the assessment in recent years there has been an increase in the commercialization of intellectual property ip via such mechanisms as patents licences copyrights and trade marks new institutions e g science parks as well as new organizational forms e g research joint ventures have emerged to facilitate the creation and commercialization of ip existing institutions most notably universities have become much more aggressive in protecting their ip and devising ways to generate additional revenue from their ip portfolios these trends have important policy implications which are addressed by the authors in this issue we summarize their contributions and provide some context for assessing these salient matters