detecting periodically collapsing bubbles a markov switching unit root test this paper addresses the problem of testing for the presence of a stochastic bubble in a time series in the case that the bubble is periodically collapsing so that the asset price keeps returning to the level implied by the market fundamentals as this is essentially a problem of identifying the collapsing periods from the expanding ones we propose using a generalization of the dickey fuller test procedure which makes use of the class of markov regime switching models the potential of the new methodology is illustrated via simulation and an empirical example is given copyright 1999 john wiley sons ltd

temporal change in occupational earnings attainment 1970 1980 we investigate change in occupational earnings in the united states during the 1970s by comparing similar models at either end of the decade since the 1970s were years of relative economic stagnation we anticipated that they would not be favorable to women the authors find that although earnings attainment generally appeared less dependent on workers status characteristics in 1980 than in 1970 incomes increased less for occupations where concentrations of women were high earnings returns to human capital increased during the interval largely owing to stronger returns among males in addition female earnings were more sensitive than male earnings to workers status characteristics data are from a variety of official and other published sources excerpt

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

interorganizational determinants of promotion client leadership and the attainment of women attorneys explanations of gender inequality typically emphasize individual characteristics the structure of internal labor markets or pressures from the institutional environment extending the structuralist and institutional perspectives this article argues that the demographic composition of an organization s exchange partners can influence the demographic composition of the focal organization when the focal organization is dependent upon its partners specifically law firms with women led corporate clients increase the number of partners who are women attorneys data on elite law firms and their publicly traded clients support a bargaining power hypothesis whereby law firms promote women attorneys when their corporate clients have women in three key leadership positions general legal counsel chief executive officer and board director these effects are stronger when the law firm has few clients reinforcing the hypothesis that interorganizational influence is more vital when a focal organization is depe

licensing policy and technology adoption in standard setting organizations the standard setting organizations decisions on licensing policy and standard s technological specification and the ensuing implications for social welfare are analyzed the author finds the conditions under which a licensing rule that grants monopoly power to the licensors whose technology is adopted in the standard can be employed by the members of the consortium ex post licensing moreover it is shown that the adoption of ex post licensing might lead to the inefficient exclusion of an efficient stand alone licensor finally the author discusses the conditions under which a policy of ex ante licensing can be less efficient than ex post licensing jel k21 l15 l24 l42

the structure of disadvantage individual and occupational determinants of the black white wage gap this study is motivated by the idea that the racial gap in earnings is generated not only by individual differences but also by systematic variation in the occupational structure that attenuates or exacerbates the effects of race using data from the 1990 census and the dictionary of occupational titles a hierarchical linear modeling approach is employed that allows the simultaneous exploration of the mechanisms of income inequality operating both within and between occupations among private sector employees striking evidence shows that racial disparities increase in both absolute and percentage terms as one moves up the occupational earnings hierarchy the association between average occupational earnings and within occupation racial disadvantage reveals an overlooked source of racial earnings inequality which constrains the opportunities available to upwardly mobile black men in the private sector this association cannot be explained by measured individual characteristics or by the status demographic composition or skill demands of occupations in the public sector on the other hand racial inequality in earnings is not systematically associated with average occupational earnings and is instead more closely tied to individual human capital and occupational placement the implications of these results are considered and directions for future research are suggested

regime switching analysis for the impacts of exchange rate volatility on corporate values a taiwanese case a second moment regime switching model with not only a switching intercept and a switching slope but also a switching error variance is applied to examine the impacts of exchange rate volatility erv on corporate values cv for the 10 industries investigated in taiwan two different regimes categorized as strong impact and weak impact are identified the dominant power varies from one industry to another the wald statistics for the null of equality are ambiguous which show that if the markov switching ms model is plausible then the erv might not be one major factor but another factor that could switch the cv of taiwan s industries for the model s volatility influence the data of 8 out of 10 industries are shown to fit a two state model when the volatility is stimulated a two state first order ms model is appropriate for the goodness of fit analysis at the 10 significant level

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

inflation and taxation with optimizing governments this paper examines the empirical validity of the predictions that if governments minimize the deadweight loss from raising revenue through inflation and tax finance there should be a positive contemporaneous association between inflation and the level of tax burdens the authors examine the empirical validity of this prediction using data from great britain france germany japan and the united states inflation and tax rates are as likely to be negatively as positively correlated so the results cast doubt on the empirical relevance of simple models in which governments with time invariant tastes choose monetary policy to equate the marginal deadweight burdens of inflation and taxes copyright 1990 by ohio state university press

cross licensing and competition we study bilateral cross licensing agreements between n 2 firms that engage in competition after the licensing phase it is shown that the most collusive cross licensing royalty i e the one that allows the industry to achieve the monopoly profit is sustainable as the outcome of bilaterally efficient agreements in a symmetric setting if the terms of the cross licensing agreements are not observable to third parties the monopoly royalty is the unique symmetric bilaterally efficient royalty however when the terms of the agreements are public the most competitive royalty i e zero can also be bilaterally efficient policy implications regarding the antitrust treatment of cross licensing agreements are derived from these results

deterrence by market sharing a strategic incentive for licensing the potential of an incumbent firm to retain its dominant position in a market is a focal point of the modem theory of industrial organization a recent literature examines this issue for markets in which challengers threaten an incumbent s position by engaging in research for a new technology richard gilbert and david newbery 1982 show that an incumbent firm with a firstmover advantage will preempt potential entrants by inventing a new technology slightly earlier than would its rivals in a stochastic r d therefore its introduction does not alter the decision to research when the pre innovation market is characterized by an incumbent and potential entrants stephen salant 1984 shows that licensing ex post to innovation can alter the research decision as anticipation of the returns from future licensing encourages research by the entrant as a counterpoint to the salant result i find that licensing ex ante to research may discourage further research by the entrant indeed this strategic incentive for licensing may be so strong as to persuade the incumbent as well as the entrant to terminate research activity to isolate this incentive for licensing from the one discussed by salant a simple model is constructed in which licensing of future technologies is not desirable anecdotal evidence suggests that the strategic incentive does lead innovators in some markets to license their technologies examples of this information sharing are prevalent in markets where technological change is rapid in the 1940 s standard oil of new jersey discovered a process for synthetic rubber it traded patent rights on this process for a synthetic oil production process discovered by farben a german rubber company in both the synthetic oil and synthetic rubber markets rival companies were department of economics scarsborough college university of toronto toronto ontario canada m5s lal i thank jon cohen and ron saunders for discussions that inspired this paper i am also grateful to yehuda kotowitz andy mclennan jennifer reinganum ralph winter myma wooders two anonymous referees and seminar participants at the university of toronto for helpful comments on earlier drafts

licensing information goods abstract a significant amount of research on patent licensing and the diffusion of knowledge is organized around static frameworks of analysis patent holders however may face a dynamic problem namely the intertemporal consistency problem of the durable goods monopolist that is induced by durability on the demand side licensing practices such as exclusive licensing contracts and most favored customer clauses allow patentees to solve or mitigate this dynamic consistency problem there are situations however where these practices are not possible either due to the nature of the patent the case of information goods or due to compulsory patenting laws we study the effects of the intertemporal consistency problem on patent licensing in these situations relative to the existing literature we obtain the following main results i all of the firms that remain in the industry will be using the innovation ii royalty licensing may be superior to fixed fee or auction licensing from the licensor s point of view iii social welfare and consumer surplus may be lower than when the patent holder can commit not to make additional sales iv even for non drastic innovations the price of the good that is produced may be lower than the competitive price corresponding to the initial situation before the innovation was discovered

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

cross licensing of competing patents as a facilitating device this paper hypothesizes that when their products are imperfect substitutes firms can promote collusion by cross licensing their competing patents cross licensing is shown to enhance the degree of collusion achieved in a repeated game by credibly introducing the threat of increased rivalry in the market for each firm s product the paper then examines the consistency of the theory developed with the available evidence antitrust implications of the practice of cross licensing of competing patents are discussed

racial wage inequality job segregation and devaluation across u s labor markets1 despite decades of research showing greater black white inequality in local areas where the black population is relatively large little is known about the mechanisms for this effect using a unique data set of individuals nested within jobs across labor markets this article tests two possible mechanisms for the black concentration effect on wage inequality job segregation and devaluation results show that black population size is associated with greater segregation of black workers into black dominated jobs on the other hand no evidence is found that the penalty for working in a black dominated job the devaluation effect increases as a function of black population size the article concludes that discrimination against workers especially exclusion from better paying jobs is an important mechanism for the effect of black population size on the racial wage gap

the incidence of cross licensing a theory and new evidence on the firm and contract level determinants abstract this paper examines the firm and contract level determinants of the incidence of cross licensing among manufacturing firms it develops a simple stochastic theory explaining such incidence which implies that cross licensing compared with unilateral licensing is more prevalent between large and symmetric firms under a reasonable set of assumptions we find strong empirical support to these implications based on a new dataset of more than 1100 licensing contracts by japanese manufacturing firms we also find that the incidence of cross licensing is higher when the contract covers only patent than when it covers only know how consistent with the theory the licensing probability between two firms depends primarily on the size of a potential licensor which according to the theory is consistent with the fact that a licensor is larger than a licensee on the average

optimal cross licensing arrangements collusion versus entry deterrence this paper analyzes optimal cross licensing arrangements between incumbent firms in the presence of potential entrants the optimal cross licensing royalty rate trades off incentives to sustain a collusive outcome vis a vis incentives to deter entry with the threat of patent litigation we show that a positive cross licensing royalty rate which would otherwise relax competition and sustain a collusive outcome dulls incentives to litigate against entrants our analysis can shed light on the puzzling practice of royalty free cross licensing arrangements between competing firms in the same industry as such arrangements enhance incentives to litigate against any potential entrants and can be used as entry deterrence mechanism

cooperation in r d the case of patent infringement agreements abstract this paper provides an insurance based argument behind patent infringement agreements pia such agreements constitute a form of cooperation in an otherwise non cooperative environment we develop a model where firms initially hold certain patents and undertake further r d by pursuing the latter they face a positive probability of infringing the patents held by the other a prior infringement agreement generates a binding contract so that such infringements would go unpunished if the infringing probability is not too low firms would have incentive to sign an agreement and sacrifice the monopoly option but this depends on the information structure about the patent infringement and search costs such a prior agreement is then compared and contrasted with a suitably designed ex post contract

fixed fee liscensing of innovations and collusion unlike other types of licensing agreements such as those with output restrictions market division clauses or output royalties licensing contracts with only a fixed fee have been perceived as having no anticompetitive consequences this paper illustrates that fixed fee licensing may facilitate collusion by enhancing the licensee s ability to credibly punish deviations from the collusive outcome on the part of the licenser antitrust implications of the result and potential ways of detecting collusion motivated licenses are discussed copyright 1996 by blackwell publishing ltd

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

working for the woman female managers and the gender wage gap most previous research on gender inequality and management has been concerned with the question of access to managerial jobs and the glass ceiling we offer the first largescale analysis that tur

per unit vs ad valorem royalties under asymmetric information we study an inside patent holder s optimal licensing policy when it has imperfect information about the value of the patent to its rival the patent holder can choose any two part licensing fee with either per unit or ad valorem royalties we demonstrate that the equilibrium will be either a fully separating contract with different per unit royalty rates or a contract with a single ad valorem royalty that excludes a high cost rival fixed fees will not be used the presence of asymmetric information uniquely drives the per unit royalties that otherwise would not be adopted per unit royalties always generate higher social welfare than ad valorem royalties

regime switching properties of the optimal seigniorage hypothesis the case of taiwan the optimal seigniorage hypothesis argues that the government will attempt to minimize the sum of social costs arising from the rate of inflation and taxation which results in the testable prediction that inflation and rate of tax revenue will be positively correlated this article empirically examines the regime switching properties of this theory using quarterly data from taiwan over 1961 2000 sampling periods it finds that the optimal seigniorage hypothesis is weakly supported and its explanatory power for the long run inflation behaviour is weak

cumulative gender disadvantage in contract employment women s wages do not grow with experience or tenure as much as men s do many accounts of this cumulative gender disadvantage attribute it to women s underinvestment in firm specific skills yet if that were true this disadvantage would not exist where firm specific skills are not rewarded by the labor market this article investigates this argument in the context of contract employment where demand for firm specificity is minimal contrary to expectations men still receive higher rewards than women over time drawing on quantitative evidence and qualitative fieldwork using job histories of high skill contractors affiliated with a staffing firm the author finds support for two sources of women s disadvantage lower rates of movement across clients on the supply side and unmeasured demand side factors by which similar levels of tenure and client transitions accrue lower rewards to women implications for research on gender stratification and career advancement in nonformalized labor markets are discussed

patent protection southern innovation and welfare in a north south trade model in a north south trade model we analyse the implications of southern patent protection on southern innovation profits and welfare southern patent protection may make the northern firm worse off and the southern firm better off by increasing the southern firm s incentive for innovation and affecting the nature of competition in the world market the impact of southern patent protection on a country s welfare and on world welfare depends on the cost of southern innovation and the degree of product substitutability we provide important insights into the outcomes of international negotiations regarding patent enforcement in the southern countries