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

can economic incentives encourage actual reductions in pesticide use and environmental spillovers chemical pesticides constitute an important input in crop production but their indiscriminate use can impact negatively agricultural productivity human health and the environment recently attention is focused on the use of economic incentives to reduce pesticide use and its related indirect effects the aim of this work is to assess the effectiveness of different economic instruments such as taxes and levies in encouraging farmers to decrease pesticide use and their environmental spillovers a policy simulation model is employed using data from dutch cash crop producers including two pesticide categories that differ in terms of toxicity and pesticides environmental spillovers four different instruments were selected for evaluation pesticide taxes price penalties on pesticides environmental spillovers subsidies and quotas the results of the study indicate that even high taxes and penalties would result in a small decrease in pesticide use and environmental spillovers taxes that differentiate according to toxicity do not lead to substitution of high with low toxicity pesticides subsidies on low toxicity products are not able to affect the use of high toxicity products pesticide quotas are more effective in reducing pesticide use and environmental spillovers

an economic analysis of the possibility of reducing pesticides in french field crops the paper aims to study the effects of reducing pesticide use by farmers in the arable sector in france and the feasibility of a policy target of reducing pesticide use by half the originality of the approach is to combine statistical data and expert knowledge to describe low input alternative techniques at the national level these data are used in a mathematical programming model to simulate the effect on land use production and farmers income of achieving different levels of pesticide reduction the results show that reducing pesticide use by 30 could be possible without reducing farmers income we also estimate the levels of tax on pesticides necessary to achieve different levels of reduction of pesticide use and the effect of an incentive mechanism combining a pesticide tax with subsidies for low input techniques

antitrust for high technology industries assessing research joint ventures and mergers the purpose of this paper is to analyze if and how the standard methodology of antitrust analysis should be modified to reflect the importance of r and d and innovation as competitive forces and engines of economic progress focus is on such r and d intensive business combinations as research joint ventures rjvs and horizontal mergers in high technology industries the authors do not propose a complete set of guidelines for the assessment of such combinations they present an economic model of rjvs and high technology mergers that might serve as an analytical underpinning for such guidelines one conclusion of the analysis is that rjvs ought to be accorded special treatment under the antitrust laws this special treatment should entail an explicit recognition that rjvs will be scrutinized under the rule of reason according to guidelines specific to this purpose

term premiums in bond returns abstract this paper examines expected returns on u s treasury bills and on u s government bond portfolios expected bill returns are estimated from forward rates and from sample average returns both estimation methods indicate that expected returns on bills tend to peak at eight or nine months and never increase monotonically out to twelve months reliable inferences are limited to treasury bills and thus to maturities up to a year the variability of longer term bond returns preempts precise conclusions about their expected returns

a dynamic auction for multi object procurement under a hard budget constraint this contribution revisits the problem of allocating r d subsidies by government agencies typically the applicants financial constraints are private information the literature has recommended the use of auctions in order to reduce information rents and thus improve the efficiency of how scarce public funds are allocated we propose a new open clock auction for this procurement problem this auction is strategically simple as it exhibits truthtelling in dominant strategies and satisfies ex post rationality while observing the budget constraint we test the auction in monte carlo simulation and discuss its applicability and limitations moreover we highlight connections to recent advances in computer science

the effects of public r d subsidies on firms innovation activities the case of eastern germany this study analyzes the effects of public r d policy schemes on the innovation activities of firms in eastern germany the main question in this context is whether public funds stimulate r d activities or simply crowd out privately financed r d empirically we investigate the average causal effects of all public r d schemes in eastern germany using a nonparametric matching approach compared to the case in which no public financial means are provided it turns out that firms increase their innovation activities by about four percentage points

is public r d a complement or substitute for private r d a review of the econometric evidence is public r d spending complementary and thus additional to private r d spending or does it substitute for and tend to crowd out private r d conflicting answers are given to this question we survey the body of available econometric evidence accumulated over the past 35 years a framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross section data from various levels of aggregation laboratory firm industry country the findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the experiment s that the investigators envisage is not adequately specified we conclude by offering suggestions for improving future empirical research on this issue

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

tax induced bias in forward rates term premiums and the term structure of interest rates abstract this paper s analysis on the tax induced bias in forward rates enables us to better understand the structure of term premiums and the term structure of interest rates and to obtain a better estimate of the future interest rate in particular the anomaly of negative term premiums regarding long maturities as reported by fama 1984 is resolved

tax effects in term structure estimation this study is a refinement and an extension of an earlier study by mcculloch of tax effects in the regression equation for term structure estimation this study includes tests for tax effects and heteroskedasticity a reconsideration of the need for an instrumental variable and a search for the capital gains tax rate in addition to the ordinary income tax rate there are two major findings 1 statistically significant taxinduced bias in the non tax adjusted equation and 2 evidence that the capital gains tax is misspecified in the tax adjusted equation it is well known e g see 4 2 pp 727 30 and 25 that the yield curve is an imperfect surrogate for the term structure of interest rates and various methods have been developed to estimate the term structure directly by regressing prices on payments in a sample of default free securities 1 since investors are concerned with the after tax payments on securities it is desirable to incorporate tax effects in term structure estimation mcculloch 22 and schaefer 26 29 have employed different approaches to the tax effect problem mcculloch employed the regression approach and searched for a single tax rate

an international study of tax effects on government bonds it is shown that coupon bonds alone are not sufficient to span time dated claims on ordinary income capital gains and non taxable wealth in an incomplete bond market where the pure dated claims are not spanned by existing bonds marginal rates of substitution between present consumption and pure dated claims on ordinary income capital gains income and non taxable wealth respectively can differ across bondholders however the relative pricing of coupon bonds in each of these countries is shown to be consistent with the tax status of the major non tax exempt holders of government debt

choosing organizational modes of strategic technology partnering international and sectoral differences this paper focuses on international strategic technology partnerships and the choice that companies have in terms of the organizational mode either through complex inter organizational modes involving equity sharing or contractual non equity alliances the empirical results show that the choice of particular mode of cooperation varies with the technological characteristics of sectors of industry joint ventures are disproportionately represented in relatively mature industries contractual alliances dominate strategic technology partnering in so called high tech industries

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

smart policies to reduce pesticide use and avoid income trade offs an agent based model applied to thai agriculture abstract policy makers in developing countries need better evidence of how changes in pesticide regulation would affect pesticide reduction and farm incomes but there are very few modeling tools that can provide such information the present study develops a new model based on mathematical programming based multi agent system mpmas a simulation software that allows assessing ex ante the impact of alternative pesticide use reduction strategies including combinations of pesticide taxes the introduction of integrated pest management a price premium for safe agricultural produce and subsidies for biopesticides the model is parameterized with farm and plot level data from northern of thailand where the adoption of high value cash crops has been accompanied by a rapid increase in synthetic pesticide use simulation results suggest that a pesticide tax alone has little effect on synthetic pesticide use a smart policy package combining integrated pest management a progressive pesticide tax based on toxicity and subsidies lowering the price of biopesticides can reduce average use of hazardous pesticides by 34 over current levels without adverse effects on the average farm income

earnings and employment effects of continuous off the job training in east germany after unification the effects of continuous off the job training oft for east germans after unification are analyzed in terms of their earnings and employment probabilities using the potential outcome approach to causality as general framework different matching procedures are suggested for the estimation they allow for permanent and transitory shocks that influence oft participation and labor market outcomes the matching procedures also take account of individually different starting dates the data are taken from the german socio economic panel gsoep 1990 1994 this dataset is very informative with respect to factors influencing the participation in training the results show no positive effects of training

inter firm cooperation with imperfectly appropriable research abstract inter firm collaboration in pre competitive research is not always beneficial rather its effectiveness in raising social benefits relative to a non cooperative setup depends on both the nature of the agreement and the technological and market conditions of the industry in question joint ventures that simply allow members to coordinate their actions in pre competitive research can restore firm incentives for both pre competitive research and development in the presence of high knowledge spillovers and poor opportunities for innovation joint ventures which additionally improve the dissemination of information among member firms raise social benefits whenever the opportunities for innovation are not exceptionally good even in the presence of relatively insignificant spillovers

the impact of classes of innovators on technology financial fragility and economic growth in this article we study innovation processes and technological change in an agent based model by including a behavioral switching among heterogeneous innovative firms the model is able to replicate via simulations well known industrial dynamic and growth type stylized facts the main original element of the model is that firms are allowed to endogenously change among three different classes namely single innovators collaborative innovators and imitators moreover our analysis focuses on the impact of these three innovation categories on micro meso and macro aggregates we find that collaborative companies are those having the highest positive impact on the economic system furthermore we have paid particular attention to the role of credit market in promoting smart growth for this purpose we analyze the role of banks as sources of external funds for innovative entrepreneurs our results suggest a trade off between short term profit maximization and long term efficiency which prevents banks to foster investment in r d and technological progress the model is then used to study the effect that different innovation policies have on macroeconomic performance

the relationship between r d collaboration subsidies and r d performance empirical evidence from finland and germany this study focuses on the impact of innovation policies and r d collaboration in germany and finland we consider collaboration and subsidies as heterogeneous treatments and perform an econometric matching to analyze r d and patent activity at the firm level in general we find that collaboration has positive effects in germany subsidies for individual research do neither exhibit a significant impact on r d nor on patenting but the innovative performance could be improved by additional incentives for collaboration for finnish companies public funding is an important source of finance for r d without subsidies recipients would show less r d and patenting activity whilst those firms not receiving subsidies would perform significantly better if they were publicly funded copyright 2007 john wiley sons ltd

shifting foundations of agricultural policy analysis welfare economics when risk markets are incomplete the neat alignment of resources output and prices specified by the perfect competition model is far from duplicated in free markets and the equally neat alignment assumed under the constraints of a program is not experienced when programs are in effect in particular areas under empirically determined supply curves are unlikely to represent opportunity costs the basic theory is invaluable in providing a conceptual orientation for the analysis of programs but the assumptions implicit in the literal use of simple forms of it for policy conclusions are breathtakingly heroic

pesticide taxation and multi objective policy making farm modelling to evaluate profit environment trade offs abstract many countries in western europe have introduced voluntary programmes to encourage farmers to adopt environmentally more benign practices such as integrated pest management but more policy action appears to be needed to meet the environmental quality levels now demanded input taxes could assist in meeting policy objectives the issue considered here is the identification of the most appropriate specification of a tax instrument to reduce the environmental problems of agricultural pesticide usage this paper takes a farm systems approach to evaluation a case study illustration is given for a specialist arable farm in the uk combining an economic model of land use and production with a set of environmental indicators for pesticides linking these two components allows the identification of the potential trade offs between achieving reductions in the environmental burden to a number of ecological dimensions and farm income different pesticide tax specifications vary in both the magnitude and the direction of their impacts the results of the model indicate that either compromises will have to be made in environmental policy or additional instruments will be required to counter act the negative side effects of some instruments

the diversity of r d consortia and firm behavior evidence from japanese data an empirical analysis of japanese government sponsored r d consortia involving 213 firms over 13 years shows that the diversity of a consortium is associated with greater r d expenditure by participating firms diversity is alternatively measured by the montgomery 1982 index based on 3 digit sic codes and branstetter and sakakibara s 1998 modification of the jaffe 1986 patent portfolio based index

a microeconometric evaluation of the active labour market policy in switzerland in the second part of the 1990 s switzerland conducted an ambitious active labour market policy almp encompassing a wide variety of programmes we evaluate the effects of these programmes on the individual employment probability of potential participants our econometric analysis uses unusually informative data origi nating from administrative unemployment and social security records we apply a matching es timator adapted for the case of multiple programmes we find substantial positive effects for one particular programme that is a unique feature of the swiss almp it consists of a wage subsidy for temporary jobs in the regular labour market that would otherwise not be taken up by the unemployed we also find large negative effects for traditional employment programmes oper ated in sheltered labour markets for training courses the results are mixed doi 10 1111 1468 0297 00072 download internet appendix pdf 2 590 kb

agri environmental policies for biodiversity when the spatial pattern of the reserve matters the aim of this paper is to compare different environmental policies for cost effective habitat conservation on agricultural lands when the desired spatial pattern of reserves is a random mosaic we use a spatially explicit mathematical programming model which studies the farmers behavior as profit maximizers under technical and administrative constraints facing different policy measures each farmer chooses the land use on each field which determines the landscape at the regional level a spatial pattern index ripley l function is then associated to the obtained landscape indicating on the degree of dispersion of the reserve we compare a subsidy per hectare of reserve with an auction scheme and an agglomeration malus we find that the auction is superior to the uniform subsidy for cost efficiency the agglomeration malus does better than the auction for the spatial pattern but is more costly

pesticide risk valuation in empirical economics a comparative approach abstract pesticide use in agriculture poses several risks to both human health and nontarget agro ecosystems due to lack of information on the monetary value of reducing pesticide risks it is difficult to perform an economic analysis that addresses social efficiency of policy and draws conclusions about the appropriate degree of regulation the aim of the current paper is to present a critical overview of the empirical literature on pesticide risk valuation that provides disaggregate willingness to pay estimates wtps of pesticide risks reduction recent multidimensional classification methods such as coined decision tree analysis are used in a comparative approach as tools for explaining the differences in empirical research findings the analysis shows that the order of magnitude of wtps is related to both the valuation technique and to the data available from biomedical and ecotoxicological literature it also shows that wtp estimates of pesticide risks cannot be simply averaged over several empirical studies the order of magnitude of a wtp estimate is in fact related to the specific type of risk and to the nature of the risk scenario considered as well to lay people s subjective perception of risks

endogenous spillovers and the performance of research joint ventures we present a model of r d with endogenous spillovers and demonstrate that noncooperation can produce maximal spillovers the only other noncooperative outcome is minimal spillovers when noncooperation achieves maximal spillovers so does an rjv whereas minimal noncooperative spillovers imply partial but not necessarily maximal spillovers by an rjv partial rjv spillovers are chosen for anti competitive reasons and an rjv may also close a lab for anti competitive reasons the possibility of anti competitive outcomes is precluded in the existing literature on rjvs which focuses on symmetric outcomes our model predicts when anti competitive behaviour by an rjv arises

cooperative r d and vertical product differentiation abstract a partial equilibrium model with vertical product differentiation coumot competition and quality determined by r d expenses is analysed cooperative agreements on r d entail higher levels of r d quality output and welfare than at the non cooperative equilibrium under well denned conditions on spillover rates this confirms in a new setting a well known outcome of models with cost reducing r d further cooperation in r d allows a larger number of firms to operate in the industry than in the non cooperative case via a reduction in prices a new source of social gains from cooperative research is identified

demand side vs supply side technology policies hidden treatment and new empirical evidence on the policy mix this paper provides new empirical evidence about the impact of various technological policies upon firms innovative behaviour we take into consideration the role of policies for innovative activities and we focus on their interaction while supply side policies such as r d subsidies and tax credits have been both extensively discussed in the literature and empirically investigated the analysis of innovative public procurement is a growing trend in the literature which still lacks robust empirical evidence in this paper we replicate the existing results on supply side policies surmise fresh empirical evidence on the outcome of innovative public procurement and address the issue of possible interaction among the various tools when controlling for the interaction with other policies supply side subsidies cease to be as effective as reported in previous studies and innovative public procurement seems to be more effective than other tools the preliminary evidence suggests that technology policies exert the highest impact when different policies interact

inventor networks in renewable energies the influence of the policy mix in germany technological change and gains in efficiency of renewable power generation technologies are to a large extent driven by governmental support various policy instruments that can broadly be categorized as technology push demand pull or systemic constitute part of the policy mix for renewable energies our goal is to gain insights into the influence of this policy mix on the intensity and organization of inventive activities for wind power and photovoltaics in germany since the 1980s we examine the effect of different instruments on the size and structure of co inventor networks based on patent data our results indicate notable differences between the technologies the network size for wind power is driven by technology push and systemic instruments while in photovoltaics demand pull is decisive for network growth by and large the instruments complement each other and form a consistent mix of policy instruments the structure of the networks is driven by demand pull for both technologies systemic instruments increase interaction especially in the wind power network and are complementary to demand pull in fostering collaboration

economic and environmental impact of the cap mid term review on arable crop farming in south western france the issue addressed in this paper is whether implementation of the cap mtr involving decoupled payments reduced by modulations and subject to cross compliance measures can be effective in improving the environmental impact of arable farming the focus is on two french cross compliance measures compulsory buffer strips along rivers and crop diversity a farm level bio economic model incorporating yield uncertainty is built and adjusted to represent two typical arable farms in the southwest of france the model also combines agro environmental indicators the results indicate that a simple decoupling of direct payments without cross compliance measures has no impact on allocations between different crops if cross compliance measures are imposed a small reduction in the cultivated area of irrigated crops is observed the penalty levied 1 of the total subsidy paid when farmers do not comply with the buffer strips requirement is sufficient for both farm types decoupling and modulation result in a fall in the total gross margin of around 3 principally because of the 5 modulation rate while the buffer strips requirement leads to a further decrease of around 1 moreover this requirement improves the environmental indicators at the farm level

public policy towards r d in oligopolistic industries the importance of determining optimal policy towards r d cannot be exaggerated given the worldwide interest in fostering r d and given the significant differences between european and u s policies towards interfirm cooperation on r d moreover the problem is an inherently difficult one because of the complex nature of the r d process since r d is a component of fixed costs industries where it is important tend to be concentrated hence r d policy must go hand in hand with competition policy at the same time r d is like any form of investment in that it precedes the production stage hence issues of time consistency and strategic commitment inevitably arise in considering the choice of r d policy finally r d by one firm typically leads to spillovers wbich benefit other firms so that r d exhibits many of the character department of economics university college dublin belfield dublin 4 ireiatid for helpful discussions and comments we are grateful to two anonymous referees to pedro bartos steve martin massimo motta and damien neven and to participants at seminars in birmingham st andrew s and warwick at a cepr workshop on r d spillovers in lausanne at erwit 94 in caslel gandolfo eea 95 in prague the 1996 conference on industrial economics at universidad carlos iii de madrid and a meeting of the dublin economics workshop this paper was produced as part of the international economic performance programme of the centre for economic performance london school of economics supported by the u k esrc an earlier version was circulated as cepr discussion paper no 1243 see alexis jacquemin 1988 and stephen martin 1996 istics of a public good albeit one that is mostly privately produced tbe degree to which such spillovers occur and can be internalized is another crucial influence on the desirable pattem of intervention