patents or prizes monopolistic r d and asymmetric information abstract in this paper a model of r d regulation is analysed to compare the effect of two types of asymmetric information on the welfare properties of patents and prizes as r d incentive instruments when there is a technological leader using the case of full information as a benchmark it is found that the trade off between patents and prizes does not change if the innovator s r d costs are private information whereas the relative efficiency of patents decreases if the government is less informed about the market for the innovation

a joint product analysis of the adoption of modern cereal varieties in developing countries semi dwarf wheat varieties have been slow to diffuse in some regions despite their superior grain yield we analyze varietal differences in yields of the joint products of grain and straw the decision to adopt new varieties and nitrogen demand the low straw yield of semi dwarf varieties under low input conditions is shown to be a plausible explanation for their slow adoption in some regions first generation modern varieties induced a large increase in the derived demand for nitrogen but subsequent varietal development appears to have had little impact on nitrogen demand

sense and sustainability revisited the limits of total factor productivity measures of sustainable agricultural systems many economists have advocated and applied total social factor productivity tsfp i e total factor productivity estimated with both market and non market inputs and externalities and with all factors valued at social prices as a single all embracing measure of agricultural sustainability this paper reviews the conceptual and practical issues in measuring tsfp and shows that no one measure alone will be theoretically or empirically robust as an indicator of sustainability tsfp is a conceptually flawed measure since inclusion of non market inputs and outputs and social price based valuation in most cases violates the theoretical basis underlying those estimates trends in tsfp also have limited value in diagnosing the nature of sustainability problems unless changes in productivity are related to underlying changes in technology human and physical infrastructure and indicators of resource quality more attention needs to be given to defining key indicators of agro ecosystem health and relating these measures to trends in productivity this analysis must be sufficiently disaggregated and for a long enough time period to allow for spatial and temporal variability inherent in agricultural production secondary data at the district level on both conventional inputs and outputs and resource quality have recently allowed more quantitative estimates of sustainability and its causes with limited data yield growth decomposition analysis can often be used to provide valuable insights into sustainability problems meanwhile there is a need to invest in long term experimental and panel surveys of farmers and their fields for key production systems in order to provide long term data that will allow full productivity accounting using more formal statistical procedures regardless of the approach selected the findings of this paper strongly suggest a need for economists agronomists and soil scientists to collaborate in integrating approaches in order to provide more robust and informative measures of sustainability

analyzing the welfare impacts of full line forcing contracts theoretical investigations have examined both anti competitive and efficiency inducing rationales for vertical bundling making empirical evidence important to understanding its welfare implications we use an extensive dataset on full line forcing contracts between movie distributors and video retailers to empirically measure the impact of vertical bundling on welfare we identify and measure three primary effects of full line forcing contracts market coverage leverage and efficiency we find that bundling increases market coverage and efficiency but has little impact on one distributor s gaining leverage over another as a result we estimate that full line forcing contracts increased consumer and producer surplus in this application

the structure of licensing contracts industrial organization theory has explored several issues related to licensing but empirical analyses are extremely rare we amass a new and detailed dataset on licensing contracts and use it to present some simple facts concerning licensing behavior our analysis reveals robust cross industries differences in several contractual features such as exclusivity cross licensing ex ante versus ex post technology transfers and licensing to related versus unrelated parties we offer an interpretation of these facts based on cross industry variation in the strength of intellectual property rights

on the effective use of stigma as a crime deterrent abstract stigma affects convicted offenders if employers reduce their wage current research considers this kind of informal sanctioning as an effective means for reducing crime and proposes its fostering by the government in this article i first show that increasing stigma may even enhance crime while stigma enhances deterrence of an unconvicted offender it may drive a stigmatized ex convict towards recidivism secondly i provide a solution for guaranteeing stigma s effectiveness notably a harsh er punishment for repeat offenders is required finally with the theoretical analysis as a background stigmatization policies pursued in the states switzerland and spain are compared

calculating levels of protection is it always appropriate to use world reference prices based on current trading status abstract protection measures such as the nominal protection coefficient npc the effective protection coefficient epc the producer subsidy equivalent pse and the consumer subsidy equivalent cse are conventionally calculated using world reference prices based on current trading status under certain conditions the conventional approach can lead to incorrect estimation of the degree and sometimes even the direction of protection this paper spells out the conditions under which use of world reference prices based on current trading status is incorrect and presents data for wheat in pakistan to illustrate how failure to consider these conditions can lead to misleading policy recommendations

patent policy imitation incentives and the rate of cumulative innovation abstract we study an infinite horizon cumulative innovation model in which patents are characterized by their length and the likelihood of being ruled valid in a patent infringement litigation strengthening patent protection via a greater validity or length has two opposing effects on innovation 1 a negative litigation effect due to increasing the litigation threat for future innovators and 2 a positive competition effect due to reducing profit eroding imitation by competitive firms without innovation capacity the optimal innovation maximizing patent policy balances these two opposing effects for moderate patent validity longer remaining lifetime increases innovation due to the competition effect the opposite is true for higher validity for which the litigation effect dominates moderate validity and infinite patent length maximizes innovation when future profits are subject to greater discounting and r d costs are low while strong validity and finite length stimulates more innovation under lower discounting and higher r d costs

the impact of incarceration on wage mobility and inequality a life course perspective on crime indicates that incarceration can disrupt key life transitions life course analysis ofoccupations finds that earnings mobility depends on stable employment in career jobs these two lines of research thus suggest that incarceration reduces ex inmates access to the steady jobs that usually produce earnings growth among young men consistent with this argument evidence for slow wage growth among ex inmates is provided by analysis of the national longitudinal survey of youth because incarceration is so prevalent one quarter of black non college males in the survey were interviewed between 1979 and 1998 while in prison or jail the effect of imprisonment on individual wages also increases aggregate race and ethnic wage inequality

welfare impacts of intellectual property protection in the seed industry we examine the welfare impact of different intellectual property protection ipp regimes in private sector seed research and development r d we take into account the period after expiration of legal ipp and require simultaneous equilibrium in markets for r d seeds and final product optimal ipp is remarkably insensitive to alternative parameterizations except for r d productivity results suggest that optimal ipp is greater than ipp in the u s seed corn market but lower than the ipp that could be attained with genetic use restriction technologies optimal ipp is much higher than ipp achieved under open pollinated crops or where legal ipp is limited

a patent system for both diffusion and exclusion public policy analysis of optimal patent regimes is often framed as a tradeoff between static and dynamic efficiency in this analytical framework weak patent protection and strict antitrust policy are taken to be directed toward static concerns while protection of intellectual property through strong patent laws is taken as a reflection of broader social concerns for long run growth and technological progress this characterization has some truth but the magnitude of the conflict between static and dynamic efficiency can easily be exaggerated in this article i want to argue that weak patent protection need not be inimical to economic growth and conversely that strong patent protection need not be an enemy of diffusion appropriately structured patent law and antitrust rules can together ensure incentives for r d and also induce cooperation among firms in diffusing r d results through licensing and other means at the same time cooperation among firms at the r d stage can counterbalance weak patent protection by internalizing spillovers from ongoing r d programs and such cooperation may also produce additional spillovers from the existing knowledge

inter industry r d spillovers what difference do they make the analytical framework of d aspremont and jacquemin the american economic review 1988 78 1133 1137 is extended to a two industry two firm perindustry model allowing for r d spillovers to occur within industries as well as between industries in the first part of the paper we analyze the impact of intra and inter industry r d spillovers on the level of strategic r d investments output profits and total welfare when firms compete in both the r d and output stage in the second part we compare the equilibrium outcomes that result from r d cooperation which includes both intra and inter industry r d agreements inter industry r d spillovers have a very important effect on a firm s incentives to invest in r d both directly and indirectly because of their influence on the likely impact of intra industry r d spillovers also r d agreements that cut across industries may be more socially beneficial than cooperatives whose membership comes from a single industry

the u s patent system in transition policy innovation and the innovation process abstract this paper surveys the major changes in patent policy and practice that have occured in the last two decades in the u s and reviews the existing analyses by the economists that attempt to measure the impacts these changes have had on the processes of technological change it also reviews the broader theoretical and empirical literature that bears on the expected effects of changes in patent policy despite the significance of the policy changes and the wide availability of detailed data relating to patenting robust conclusions regarding the empirical consequences for technological innovation of changes in patent policy are few possible reasons for these limited results are discussed and possible avenues for future research are suggested

assessing the sustainability of rice production growth in bangladesh abstract this paper identifies the sources of growth in rice production in bangladesh over the 1973 99 period the main contributor was found to be the conversion of rice growing areas from local to modern varieties the most important conclusion based on simulations is that the current level of per capita production can be sustained only through increased yields of modern rice varieties population control is found to have significant long run benefits while faster conversion of remaining area to modern varieties has important short run payoffs the latter two actions however can only complement but not substitute efforts to increase the yields of modern varieties

youth unemployment and crime in the english regions and wales this paper investigates the relationship between unemployment and crime in england and wales taking account of both age and gender in the unemployment measures the study is for 1985 95 and is disaggregated to the regional level we allow for different types of crime and the deterrence effects of detection and punishment we also consider the relationship between ethnicity and crime in the light of the contentious public debate on this issue our results indicate that there is a systematic positive relationship between burglary rates and male unemployment regardless of age however we find that while youth unemployment is consistently and positively related to criminal damage and robbery rates there is no systematic evidence of a relationship between adult male unemployment and these specific crimes instead our evidence supports a positive link between adult unemployment and theft we find no compelling evidence of a link between ethnicity and crime

the benefits and costs of strong patent protection a contribution to the current debate abstract today s conventional wisdom is that strong patent rights are conducive to economic progress yet not long ago students of the patent system took a more nuanced position arguing that often strong patents were not necessary to induce invention and entailed significant economic costs several empirical studies have supported this position however the current advocacy invokes theories of the positive benefits of patents that were repressed in the earlier more negative analyses this essay reviews these theories and the empirical evidence that might bear on them the authors conclude that there is reason for concern that the present movement towards stronger patent protection may hinder rather than stimulate technological and economic progress

contests for experimentation we study contests for innovation with learning about the innovation s feasibility and opponents outcomes we characterize contests that maximize innovation when the designer chooses a prize sharing scheme and a disclosure policy a public winner takes all contest dominates public contests where any success is immediately disclosed with any other prize sharing scheme as well as winner takes all contests with any other disclosure policy yet jointly modifying prize sharing and disclosure can increase innovation in a broad class of mechanisms it is optimal to share the prize with disclosure following a certain number of successes under simple conditions a hidden equal sharing contest is optimal

the worth of a wildflower precautionary perspectives on the environmental risk of gmos abstract how much is a wildflower worth inspired by the worth of a songbird by funtowicz and ravetz funtowicz s o ravetz j r 1994 the worth of a songbird ecological economics as a post normal science ecological economics 10 197 207 we use the value of a wildflower as symbol of the complexity of evaluating environmental qualities and risks we critically discuss the application of cost benefit analysis in evaluating environmental impacts of adoption of genetically modified organisms gmos we argue that cost benefit analysis should be supplemented with other methods such as processes for assessing uncertainty accommodation of scientific disagreements and integration of stakeholders interests and perspectives a more inclusive perspective is to develop precautionary approaches that recognize the multidimensional nature of environmental qualities and risks such as irreplaceability irreversibility uncertainty and complexity precautionary approaches can contribute to develop a stronger environmental responsibility within the framework of rational self interest

has the green revolution been sustained the quantitative impact of the seed fertilizer revolution in pakistan revisited abstract quantitative impacts of the green revolution on food production in the punjab of pakistan are reviewed and the effects of different technologies on wheat yields over the past two decades decomposed new quantitative evidence of sustainability problems in irrigated systems is presented the yield increases expected in the post green revolution period from the further spread of modern wheat varieties a tripling of fertilizer dosage and the release of newer higher yielding varieties have been cancelled by problems resulting from increased cropping intensity use of poor quality groundwater low fertilizer efficiency and increased weed and disease losses new directions in institutional policies and research and extension strategies are outlined to improve efficiency and sustainability in wheat production and prevent pakistan from becoming a major food grain importer in the coming decades

worldwide venture capital intellectual property rights and innovation this study based on the historical data of venture capital vc investment and patenting for 99 countries and 83 industries explores the effects of vc investment on firms innovation in different intellectual property rights ipr environments worldwide utilizing large data sets and various empirical models our negative binomial and panel data analysis presents the significant and positive impacts of vc investment and ipr parameters on firms innovation controlling for cultural regulatory and economic and market conditions of the business environment however vc investment is more effective in weaker ipr environments this effect is robust to a number of different specifications for endogeneity among other things the economic effect is pronounced the impact of vc on patents is up to five times more pronounced between the weakest and strongest ipr regime in the sample

exclusionary practices and technological competition this paper examines the effects of exclusionary practices on the process of technological change modeled as a sequence of innovations the winner of an early innovation may be able to take possibly costly actions that effectively exclude its rivals from competition for subsequent innovations the possibility of exclusion can change the equilibrium time pattern of investments in research from that of the case of no exclusion conditions that make such a change most likely are also conditions under which such a change is most likely to reduce the efficiency of the allocation of resources to technological change many people believe that the possession of unchallenged economic power deadens initiative discourages thrift and depresses energy that immunity from competition is a narcotic and rivalry a stimulant to industrial progress judge learned hand in the alcoa decision in analyzing such business strategy ex visu a given point in time the economist sees restrictions which seem to him synonymous with loss of opportunities to produce he does not see that restrictions of this type are in the conditions of the perennial gale of creative destruction often unavoidable incidents of a long run process of expansion which they protect rather than impede

licence contracts future exchange clauses and technological competition abstract in an incumbent challenger innovation model this paper examines to what extent licence contracts can internalize the business stealing and common pool externalities occurring in technological competition due to these negative externalities private r d investments are higher than the socially optimal ones licensing of current technology creates a replacement effect for the challenger and thus induces lower research rates special exchange clauses concerning future improvements which are often used in licensing practice partially take care of the common pool externality although the externalities are not internalized completely a grant back clause requiring the licensee to license back improvements to the original licensor can achieve a welfare improvement by reducing the r d investments in some cases below optimal levels if there are no restrictions in setting the ex post licence fee for the improvement socially optimal r d investments can be induced a mutual exchange clause stating that the original licensor must license an improvement to the licensee and vice versa induces social underinvestment in r d

openness open source and the veil of ignorance author s scotchmer suzanne abstract the open source movement evolved in the one industrial context where openness is not required by intellectual property law 1 nevertheless openness itself cannot be the driving force behind the open source movement this is because openness can be achieved in many ways other than the gpl for example with proprietary licenses or licenses that are even more permissive than the gpl such as the bsd license early commentators explained this new development model by focussing on the motives of the programmer such as to demonstrate skills see the survey by stephen m maurer and suzanne scotchmer 2006 but firms also participate in open source collaborations sometimes contributing significant resources joachim henkel 2006 dirk riehle 2009 doing so can be profitable even if the contributors are rivals in the market the quality improvements or cost reductions provided by a rival s open source contributions may outweigh the deleterious effect of empowering the rival to be a better competitor

a quality index for patent systems abstract this paper presents a quality index for patent systems the index is composed of nine operational design components that shape the transparency and stringency of patent systems and affect the extent to which they comply with patentability conditions seven components are related to rules and regulations e g grace period opposition process and continuation in parts while two components measure patent offices resource allocation policy i e workload per examiner and incentives the index is computed for 32 national patent systems and displays a high degree of heterogeneity across countries cross sectional quantitative analyses suggest that the demand for patent rights is lower in patent systems with a higher quality index controlling for research efforts patent fees and the strength of enforcement mechanisms these results have important policy and research metrics implications

adult labour market implications of antisocial behaviour in childhood and adolescence findings from a uk longitudinal study while antisocial behaviour in younger age groups is largely viewed as a public externality issue there are also reasons for expecting less favourable life course outcomes for those individuals who follow antisocial developmental pathways data from a uk longitudinal study of delinquent development in a cohort of working class boys are used to model the adult labour market implications of different antisocial developmental pathways to age 32 a series of probit estimations suggests that children identified as troublesome by peers and teachers at an early age and who subsequently engaged in delinquent behaviour throughout their adolescence had a significantly higher probability of experiencing long periods of time out of the workforce prior to age 32 and lengthy periods of unemployment and or low paid work at both age 18 and at age 32 a heckman selectivity model estimated on weekly earnings at age 32 does not provide evidence that antisocial development in children and adolescents is associated with a l

a survey of the economics of patent systems and procedures the last several decades have seen increases in patenting activity worldwide as well as growing issues related to patent quality in response to these quality issues a recent patent literature has emerged that investigates the behavior and incentives of patent examiners applicants and third parties in this paper we provide an overview of patent procedures patent systems and a survey of the new economic literature on patent systems both theoretical and empirical papers are considered policy implications coming from this literature are presented

the determinants of suboptimal technological development in the system company component producers relationship abstract the paper analyses the behaviour of a high tech system company in a model where her strategic variable is the choice of the contractual relationship with component producers the system company develops an optimal contractual design separating component producers qualities and providing optimal incentives to them the particular features of the system company generate however a static and an intertemporal dilemma in her optimising behaviour the static dilemma is between i releasing property rights to component producers to increase their incentives and ii maintaining more control on strategic components to improve her systemic capacity the intertemporal dilemma is about the optimal share of property rights on component products to maintain in a framework in which the strategic non strategic feature of individual components varies over time both static and intertemporal dilemmas have effects on the divergence between the system company optimum and the socially optimum level of technological development

the relative effectiveness of patents and secrecy for appropriation abstract changes in patent law global competition and the rise of several new technologies suggest that patents could be of greater value than secrecy for many innovative firms particularly small firms that are unable to use market power or other factors to appropriate their investments in innovation data from the 1993 european community innovation survey cis for up to 2849 r d performing firms is analysed to determine the relative importance of secrecy vs patents this particular combination of appropriation methods is interesting because secrecy can act as a mutually exclusive alternative to patents the results show that a higher percentage of firms in all size classes rate secrecy as more valuable than patents however ordered logit regressions show that the probability that a firm rates secrecy as more valuable than patents declines with an increase in firm size for product innovations while there is no relationship for process innovations the firm s r d intensity has no effect on the relative value of secrecy vs patents there is weak evidence to show that participation in cooperative r d increases the value of patents over secrecy for product innovations the results are relevant to ongoing debates over changes to the patent system and the need for policies to encourage small firms to patent more

patents imitation and licensing in an asymmetric dynamic r d race abstract rd some may have an advantage in early stages of the r d process while others may have advantages in other stages of the process this paper uses a two firm asymmetric ability multistage r d race model to analyze the effect of patents imitations and licensing arrangements on the speed of innovation firm value and consumers surplus by using numerical analyses to study the mpe of the r d race the paper demonstrates the circumstances under which a weak patent protection regime that facilitates free imitation of any intermediate technology may yield a higher consumers surplus and total surplus than a regime that awards a patent for the final innovation the advantage of imitation may hold even when we allow for voluntary licensing of intermediate technologies

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

optimal disclosure delay in multistage r d competition abstract this paper analyzes the effects of a policy of disclosure with delay on the speed of discovery and incentives to invest in a multi stage patent race depending on the parameters four equilibrium configurations are obtained in the first a single firm acts as a monopolist in the second a single firm invests at the initial stages but the second firm joins the race after the disclosure of the intermediate product in the third both firms invest when they have equal knowledge but only the leader invests before the disclosure of the intermediate product in the last configuration firms always compete except when the disclosure date is close the determination of the optimal disclosure delay involves a trade off between the incentives to invest and the expected time of discovery of the final product

innovation intellectual property rights and economic development a unified empirical investigation two important strands of literature investigate the way the effect of intellectual property rights ipr on innovation depends on either the initial ipr level or the level of economic development we expand on this by studying their joint effect in a single unified empirical framework we find that the effect of ipr on innovation is more complex than previously thought displaying important nonlinearities depending on the initial levels of both ipr and per capita gdp the policy implications of this are examined and include the conclusion that a single global level of ipr is in general sub optimal

patent law and complementary innovations this paper explores which patent policy should be applied to complementary innovations that are aggregated into broader technologies i compare a setting in which complementary innovations must be bundled prior to patenting with a second setting in which they can be patented separately the first setting can improve static efficiency by avoiding the costs resulting from the scattering of complementary patents but it also limits the disclosure of small innovations which may lead to inefficient r d cost duplications a model capturing these effects shows that patenting complementary innovations separately is not efficient when innovations can be developed rapidly this result justifies the enforcement of a severe inventive step or non obviousness requirement in sectors where complementary innovations are frequent

do national patent laws stimulate domestic innovation in a global patenting environment a cross country analysis of pharmaceutical patent protection 1978 2002 this paper evaluates the effects of patent protection on phar maceutical innovations for 26 countries that established pharmaceutical patent laws during 1978 2002 controlling for country characteristics through matched sampling techniques to establish two proper comparison sets among 92 sampled countries and through country pair fixed effects regressions this study yields robust results national patent protection alone does not stimulate domestic innovation as estimated by changes in citation weighted u s patent awards domestic r d and pharmaceutical industry exports however domestic innovation accelerates in countries with higher levels of economic development educational attainment and economic freedom additionally there appears to be an optimal level of intellectual property rights regulation above which further enhancement reduces innovative activities

the dynamics of the transfer and renewal of patents this article explores new data on the transfer and renewal of u s patents and interprets this new evidence using a model of patent transfers and renewal we find that the proportion of transferred patents is large and differs across technology fields and especially type of patentees we also find that the probability of a patent being traded depends on a number of factors the age of the patent the number of citations received by a given age the patent generality and whether the patent has been previously traded or not these findings are consistent with the predictions of a model of patent transfers and renewals

on the effectiveness of patenting strategies in innovation races which if any of a firm s inventions should it patent should it patent at all many companies engaged in an innovation race seek a patenting strategy that balances protection of their intellectual property against the knowledge spillovers resulting from disclosure requirements not much is known about factors that determine the patenting strategy best able to resolve this trade off although scholars in various management economics and engineering disciplines have researched patents and patenting regimes little work has addressed the normative issues that pertain to forming an appropriate firm level patenting strategy we develop an inventory of real life patenting strategies and integrate them into a coherent framework our simulation model characterizes the optimal patenting choices for different environmental and firm level contingencies while capturing the dynamics between competing firms we identify the firm s research and development strategy as the most salient determinant of its optimal patenting strategy our research contributes to establishing a contingency theory of patenting strategies this paper was accepted by david hsu entrepreneurship and innovation

using patents to mislead rivals firms claim they do not rely heavily on patents yet they patent as indicated by the large number of patents that are granted this paper offers a possible resolution to this puzzle it takes a simplified version of a duopoly innovation race and studies the patenting decision of an innovator who has private information about the improvability of her innovation it is shown that a firm may use the patenting decision to mislead her rival under symmetric information research can be stimulated but not disclosed however under asymmetric information disclosure is more likely even though research incentive may be weakened jel classification 031 l1 de l utilisation des brevets pour leurrer les concurrents les entreprises innovatrices pretendent ne pas compter sur leurs brevets afin de s approprier les rendements de leurs innovations cependant les firmes brevetent comme l atteste le nombre de brevets deposes nous proposons une explication a cette apparente contradiction dans un modele simplifie de course a l innovation a deux firmes nous etudions la decision de breveter d un innovateur qui a une information privee sur l ameliorabilite de son innovation nous montrons que la decision de breveter peut etre utilisee afin de leurrer la firme concurrente lorsque les deux firmes partagent la meme information bien que la recherche puisse etre stimulee nous montrons qu elle reste non brevetee et donc non divulguee cependant lorsque l information est asymmetrique l innovateur brevete plus souvent son innovation mais son concurrent a alors moins d incitation a entreprendre la recherche

experimenting with contests for experimentation we report an experimental test of alternative rules in innovation contests when success may not be feasible and contestants may learn from each other following halac kartik and liu in press the contest designer can vary the prize allocation rule from winner take all wta in which the first successful innovator receives the entire prize to shared in which all successful innovators during the contest duration share in the prize the designer can also vary the information disclosure policy from public in which at each period all information about contestants past successes and failures is publicly available to private in which contestants only know their own histories in our setting the optimal contest design in terms of maximizing the probability that at least one innovator is successful depends on the probability of successful innovation given that innovation is feasible under some parameters the designer will prefer a wta public contest while under others he will prefer shared private our experiments provide evidence that private disclosure contests behaviorally dominate public disclosure regardless of the prize allocation rule and moreover that shared private contests dominate wta private contests

welfare impacts of cross country spillovers in agricultural research the welfare implications of intellectual property protection ipp for private sector agricultural research are analyzed focusing on the realistic cases where countries provide different ipp levels technology spills over across countries and the public sector is involved in research a model is developed to determine who benefits from and who should pay for the associated research the article contains some interesting results on the implications of a harmonization of ipp policies through multilateral agreements or via technology that allows research firms to prevent the copying of plants and animals that express traits that have emerged from their research

impatience reputation and offending reconviction rates for offenders are high despite sentence severity increasing with the number of convictions the standard one shot model of crime provides little scope for exploring persistence effects although recent papers by emons and others have sought to put offending decisions into a more dynamic setting this article develops a simple two period model of offending in which criminal convictions act as an adverse signal in labour markets ordinary and multinomial logistic regression modelling is used to test the predictions of the theoritical model and explore the link between unemployment and convictions the empirical results which are based on longitudinal data from the national child development study ncds in the uk strongly support the view that ceteris paribus individuals with previous convictions are at higher risk of being unemployed

secrecy versus patenting we develop an equilibrium search model of innovation with the possibility of multiple independent discovery we distinguish innovations from ideas and we view patents as probabilistic property rights that are constrained by the innovators option to keep the innovation secret we find that the patent system can simultaneously stimulate innovation information disclosure and welfare an optimal patent may provide more or less protection than secrecy and in many cases it provides less suggesting that its main function is information spreading rather than rewarding the costs of the innovative activity

tying foreclosure and exclusion in recent years the leverage theory of tied good sales has faced heavy and influential criticism in an important sense though the models used by its critics are actually incapable of addressing the leverage theory s central concerns here the author reconsiders the leverage hypothesis and argues that tying can indeed serve as a mechanism for leveraging market power the mechanism through which this leverage occurs its profitability and its welfare implications are discussed in detail copyright 1990 by american economic association

market structure incentive to patent and the pace of innovation abstract in a model of sequential innovations it is shown that the simple monotone relationship between the number of firms and the speed of innovation see e g loury 1979 no longer holds if we explicitly take account of the incentive to patent

the quality factor in patent systems this article develops a methodology to compare the quality of examination services in three major patent systems quality is defined as the extent to which patent systems comply with the patentability conditions in a transparent way the methodology consists of a two layer analytical framework encompassing legal standards ls and their operational design od which includes several interdependent components that affect the stringency and transparency of the filtering process the comparison of patent systems in europe japan and the united states shows that their operational designs differ substantially the european system provides higher quality and more expensive examination services than the united states one while the japanese patent system is in an intermediate position the results illustrate that different system designs lead to different outcomes in terms of backlogs patent propensity and the number of dubious patent rights in force in this respect these findings i provide an empirical validation of the conjecture of a vicious cycle linking the quality of examination and demand for patents and ii highlight the need for a multifaceted convergence of patent systems before mutual recognition is put in place the author 2011 published by oxford university press on behalf of associazione icc all rights reserved

myopia and addictive behaviour we present a theory of addictive behaviour which can account for addicts apparent disregard for the future consequences of their current actions the discounting of future utility is increasing in past consumption indicating increasingly myopic behaviour as consumption increases the intertemporal complementarity generated by the endogenous discounting produces multiple steady states which can account for the simultaneous existence of myopic addicts and non myopic non addicts within a time consiste nt expected utility framework the theory also accounts for the probabilistic incidence of addiction and successful rehabilitation and the possibility of recurrence

market structure innovation and vertical product differentiation abstract we reassess arrow s 1962 economic welfare and the allocation of resources for invention in nber the rate and direction of innovative activity princeton university press princeton nj results concerning the effect of market structure on the returns from process innovation here we consider product innovations that are vertically differentiated from older products in the sense of shaked and sutton 1982 relaxing price competition through product differentiation review of economic studies 49 3 13 shaked and sutton 1983 natural oligopolies econometrica 51 1469 1484 competition and monopoly in the old product market provide identical returns to innovation when i the monopolist is protected from new product entry and ii innovation is non drastic in the sense that the monopolist supplies positive quantities of both old and new products if the monopolist can be threatened with entry monopoly provides strictly greater incentives welfare may be greater under monopoly when innovation is valuable

endogenous market structures and contract theory delegation principal agent contracts screening franchising and tying abstract i study the role of unilateral strategic contracts for firms active in markets with price competition and endogenous entry traditional results change substantially when the market structure is endogenous rather than exogenous they concern 1 contracts of managerial delegation to non profit maximizers 2 incentive principal agent contracts in the presence of moral hazard on cost reducing activities 3 screening contracts in case of asymmetric information on the productivity of the managers 4 vertical contracts of franchising in case of hold up problems and 5 tying contracts by monopolists competing also in secondary markets firms use always these contracts to strengthen price competition and manage to obtain positive profits in spite of free entry

a theory of grand innovation prizes abstract the past decade has witnessed a resurgence in innovation awards in particular of grand innovation prizes gips which are rewards to innovators developing technologies reaching performance goals and requiring breakthrough solutions gips typically do not preclude the winner also obtaining patent rights this is in stark contrast with mainstream economics of innovation theories where prizes and patents are substitute ways to generate revenue and encourage innovation building on the management of innovation literature which stresses the difficulty to specify ex ante all the technical features of the winning technologies we develop a model in which innovative effort is multi dimensional and only a subset of innovation tasks can be measured and contracted upon we show that in this environment patent rights and cash rewards are complements and that gips are often preferable to patent races or prizes requiring technologies to be placed in the public domain moreover our model uncovers a tendency for patent races to encourage speed of discovery over quality of innovation which can be corrected by gips we explore robustness to endogenous entry costly public funds and incomplete information by gip organizers on the surplus created by the technology

innovation without patents evidence from world s fairs abstractthis paper introduces a unique historical data set of more than 8 000 british and american innovations at world s fairs between 1851 and 1915 to explore the relationship between patents and innovations the data indicate that the majority of innovations 89 percent of british exhibits in 1851 were not patented comparisons across british and u s data also show that patenting decisions were unresponsive to differences in patent laws cross sectional evidence suggests that high quality and urban exhibits were more likely to be patented the most significant differences however occurred across industries inventors were most likely to use patents in industries in which innovations are easy to reverse engineer and secrecy is ineffective relative to patents in the late nineteenth century scientific breakthroughs including the publication of the periodic table reduced the effectiveness of secrecy in the chemical industry difference in differences regressions suggest that this change resulted in a

illicit drug use and labour market achievement evidence from the uk this study using data from the british crime survey bcs examines the effect of drug use on occupational achievement it starts by attempting to overcome the identification problem that results from the limited set of drug use questions presented in the bcs taking this into account and allowing for the endogeneity of drug use in equations for unemployment and labour market outcomes that a mild positive association with soft drugs and occupational achievement is observed that diminishes with age this relationship holds for males but not for females in contrast it is also found that past use of hard drugs significantly increases the likelihood of current unemployment although it appears to be unrelated to occupational success conditional on achieving employment

on limiting or encouraging rivalry in technical progress the effect of patent scope decisions abstract this essay is on the effects of the scope of a patent e g how broad its allowed claims on subsequent inventing in a field it is argued that this depends on the topography of technical advance in a field in particular on how inventions are linked to each other and in the extent to which rapid technical advance requires a diversity of actors and minds as contrasted with being facilitated by express coordination of inventive activity technical advance is examined in several different fields with a focus on how patents influenced the pace and quality of development the authors conclude that allowing and enforcing broad patent claims tends to hinder technical progress

the patent paradox revisited an empirical study of patenting in the u s semiconductor industry 1979 1995 we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms

r d spillovers patents and the incentives to innovate in japan and the united states national surveys of r d labs across the manufacturing sectors in the us and japan show that intraindustry r d knowledge flows and spillovers are greater in japan than in the us and the appropriability of rents due to innovation less patents in particular are observed to play a more central role in diffusing information across rivals in japan and appear to be a key reason for greater intraindustry r d spillovers there suggesting that patent policy can importantly affect information flows uses of patents differ between the two nations with strategic uses of patents particularly for negotiations being more common in japan

how broad should the scope of patent protection be i explore the trade off between a patent s length that is its lifetime and its width that is its scope of coverage a wider patent generally reduces the distortion of consumers choices between the patented brand of the product and unpatented lower priced varieties sold by competitors but also permits higher prices which increase relative to profits the deadweight losses from consumers switching consumption out of the product class i show under what conditions infinitely lived but very narrowly focused patents are the socially efficient way to reward innovation and under what conditions very short lived but very broad patents are optimal

optimal patentability requirements with complementary innovations abstract we study optimal patent design contrasting the case that two or more innovations are needed to operate a new technology with the traditional case that a single innovation is directly commercialisable the major finding is that with complementary innovations the patentability requirements should be stronger than in the case of stand alone innovation this reduces the fragmentation of intellectual property which is socially costly however to preserve the incentives to innovate if a patent is granted the strength of protection should be generally higher than in the stand alone case

bias in market r d portfolios abstract based on a simple contest model of product innovation we find that in accordance with conventional wisdom and contrary to much of the previous theoretical literature market competition implies an equilibrium level of risk which is too low from society s standpoint the intuition is that the divergence between private and social marginal benefits from rd and this probability is higher for lower risk projects

the optimal timing of procurement decisions and patent allocations in a patent race social incentives and private incentives may sometimes coincide and at other times diverge too many researchers remain in the race if the social planner cannot determine what stage the researchers have achieved this informational constraint can result in a socially suboptimal outcome we construct a mechanism in which a planner exploits the researchers private information to determine when and to whom to allocate rights to pursue the final prize this mechanism does not require any payments and therefore will not distort earlier investment incentives it is solvable by the iterative elimination of dominated strategies

novelty and disclosure in patent law the stringency of the novelty requirement in patent law affects the pace of innovation because it affects the amount of technical information that is disclosed among firms it also affects ex ante profitability of research we compare weak and strong novelty requirements from the standpoint of social efficiency we ask how our answer depends on the rule that determines which firm gets a patent when two firms have patents pending on the same technology the possible rules are first to invent which applies in the u s and first to file which applies everywhere else

international standards for intellectual property protection and r d incentives abstract we examine the effect of alternative standards for intellectual property protection uniform protection based on the gatt principle of non discrimination provides domestic and foreign firms with the same level of protection discriminatory protection based on section 337 of the u s trade laws provides different levels of protection depending upon where the firm is located we show that discriminatory protection may not increase and may decrease domestic r d the effect of asymmetric patent protection depends on whether the rivals have pre existing products on the costs of r d and on the value of the potential innovation

patent rights and innovation disclosure this article studies optimal patents with respect to the timing of innovation disclosure in a simple model we identify forces that lead firms to either suboptimally patent too early or too late in equilibrium and we determine conditions so that stronger patents induce earlier or later equilibrium disclosure then by solving an infinite multistage patent game with a more explicit structure we describe innovation growth and derive detailed predictions that can be used for policy experiments as an application we calibrate our multistage game using summary statistics from the seeds breeding industry we find that weaker patent rights may result in welfare gains of 46 relative to the status quo the gains are achieved because weaker patents reduce competition thus leading firms to postpone patenting

subgame perfect punishment for repeat offenders i introduction the literature on optimal law enforcement typically assumes that the government can commit to sanction schemes 1 this means the government can use any set of threats to penalize wrongdoers in particular if a crime occurs the government actually sanctions the wrongdoers even though ex post it may have no incentive to do so potential wrongdoers believe that the government will carry out the threat at any cost and therefore do not engage in the act in the first place in this article i give up the assumption that the government can commit to whatever sanction scheme i consider the analysis of optimal sanctions without the possibility to commit important because judges often have a lot of discretion as to the size of the penalty they may for example adjust sanctions to the financial possibilities age education and so on of the wrongdoer accordingly i allow only for sanctions that the government actually wishes to implement should a crime have occurred ruling out full commitment changes the optimal enforcement schemes suppose for example the government does not care about the sanction as is typically assumed in the literature then it will not enforce the penalty if a crime has happened given that there is say a small cost of doing so the rational criminal will anticipate the ex post enforcement behavior of the government therefore she will commit the crime because the threat of being sanctioned is not credible once one drops the commitment assumption the typical deterrence equilibria of the law enforcement literature between potential wrongdoers and the government are based on empty threats in the language of game theory the equilibria are not subgame perfect or time consistent i study the problem of subgame perfect sanctions using the framework of emons 2003 agents may commit a crime twice the act is inefficient the agents are thus to be deterred the agents are wealth constrained so that increasing the fine for the first offense means a reduction in the possible sanction for the second offense and vice versa the agents may follow history dependent strategies that is commit the crime a second time if and only if they were were not apprehended the first time the government seeks to minimize the probability of apprehension ignoring the government s commitment problem it is optimal to set the sanction for the first offense equal to the entire wealth of the agents while the sanction for the second offense equals zero the intuition is as follows a money penalty imposed for the second offense reduces the amount a person can pay for the first offense because the wealth available to pay penalties is assumed to be fixed over the two periods for that reason a higher probability event namely a first offense that is detected will be more effective use of the scarce money penalty resource than a lower probability event namely a second detected offense why is the probability of detection lower for the second rather than for the first crime simply because an agent faces the possibility of being sanctioned for the second crime if and only if he or she has already been sanctioned the first time for further results it is important to note that the optimal probability of apprehension increases with the benefit from the crimes this decreasing sanction scheme raises of course the issue of time consistency will the government really charge the agent the entire wealth when she was apprehended for the first crime knowing that then she will commit the second act for sure isn t it better for the government to renege and charge little for the first act so that the agent still has sufficient wealth to pay a sanction that deters the second crime given that the first act has been committed anyway that way the government can at least deter the second act to study this problem i consider a rent seeking government

pre grant patent publication and cumulative innovation abstract we examine the implications of pre grant publication pp of patent applications in the context of a cumulative innovation model we show that pp leads to fewer applications and fewer inventions but it may raise the probability that new technologies will reach the product market and thereby enhances consumer surplus and possibly total welfare as well

some simple economics of gm food genetically modified food evaluating the econamic risks public opposition to the genetic engineering of food crops gm food has not been based solely on concern about biological risks economic risks have been widely cited too the fear that the world s food supply will be concentrated in the hands of a few large firms the fear that such firms will engage or are already engaging in anti competitive practices and the fear of the transfer of ownership rights over genetic resources to the private sector are these fears justified we argue that the gm food industry may be on course for further consolidation and this could be anti competitive in fact policymakers face a dilemma a stringent regulatory approval process enhances food safety but at the cost of increasing market concentration we argue also that the integration of seed and agri chemical manufacturers may bias the introduction of gm traits in undesirable directions some business practices such as tie in contracts between seeds and complementary products such as herbicides may have an exclusionary motive that warrants scrutiny on anti competitive grounds while some other practices such as the use of terminator genes appear more benign finally we argue against granting patents on genes or even on gene functions doing so may delay the development of socially beneficial applications dietmar harhoff pierre regibeau and katharine rockett

knowledge disclosure as intellectual property rights protection abstract we consider the problem of an inventor who discloses knowledge under the threat of a rival who may patent a competing idea disclosure diminishes the probability that the rival has of receiving a patent legal externality but it also decreases the rival s marginal r d cost knowledge externality our results reveal that i when the knowledge externality is large small relative to the legal one an increase decrease in the patentability standard leads to higher disclosure and promotes r d and ii if subsequent research creates positive external effects the patentability standard should be set to promote further disclosure and r d in equilibrium the impact on the equilibrium configuration of changes in market profits is also examined

french firms strategies for protecting their intellectual property in attempting to protect their innovations firms can choose from a range of mechanisms which may be either non statutory trade secrets design complexity and lead time advantage over competitors or statutory patent design registration trademark copyright yet little is known about how firms do actually make their choices from among these different appropriability mechanisms the aim of this paper is to determine how french firms use of intellectual property protection mechanisms relates to the type of innovation the characteristics of the market sector in which they operate the firms characteristics and their human resources strategies our empirical model draws on four french databases covering the period 2001 2004 our results show that the choice of a means of protection matters and emerges out of a complex strategy our results also reveal that the different statutory and non statutory means of protection are complementary within their own categories but hardly so between categories

patents vs trade secrets knowledge licensing and spillover we develop a model of two stage cumulative research and development rd yet the contracting parties choose the closed sale whenever the interim knowledge is more valuable and leakage is sufficiently high if the extent of leakage is lower more rus choose open sales generating a nonmonotonic relationship between the strength of intellectual property rights and aggregate r d expenditures and the overall likelihood of development by either du jel d23 o32 o34

uncertainty spillovers and cooperative r d abstract this paper extends the literature on cooperative r d in an oligopoly with spillovers the model has three new features it introduces uncertainty focuses on spillover of innovation instead of effort spillover and offers a new definition of the research joint venture rjv the rjv is an arrangement to coordinate r d efforts and also to share the innovation firms form an rjv only if the innovation raises flow industry profit but independently of the speed of spillovers and the degree of uncertainty the model is robust when we allow for licensing the single lab endogenous spillovers and r d effort spillovers

privatizing the intellectual commons universities and the commercialization of biotechnology abstract this paper analyzes universities recent attempts to adapt their policies and organizational arrangements in order to accommodate the commercialization of university biotechnology research we argue that these attempts have been severely hampered because internal and external parties have sought to enforce universities adherence to their historic commitment to create and sustain an intellectual commons for the benefit of society at large the standardized organizational arrangements universities maintain to administer this intellectual commons have also served to impede adaptive efforts we conclude that social contractual commitments and organizational standards can significantly affect the shape and outcome of negotiations over property rights and can place important limits on the scope of organizations potentially leading to the generation of new organizational forms