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Patent policy, investment and social welfare.
Patent policy, investment and social welfare.
International Journal of Industrial Organization.
This paper considers patent policy in an environment where firms are heterogeneous, differentiated by their technologies, and where the impact of policy varies across firms. More stringent (restrictive) patent policy reduces access to patented knowledge and affects both profitability and the innovation performance of a firm. This in turn changes a firm’s incentives to invest in innovation. The paper studies circumstances where, comparing two firms where one has a technology weaker than the other (ranked lower in the technology comparison), the impact on the technologically weaker firm of such policy is either more or less severe than on the strong firm. In each case the consequence for investment in innovation is examined. The welfare implications of such policies are also considered. One feature of the paper is that the formulation allows for a broad and multidimensional description of technologies.
This paper considers patent policy in an environment where firms are heterogeneous, differentiated by their technologies, and where the impact of policy varies across firms. More stringent (restrictive) patent policy reduces access to patented knowledge and affects both profitability and the innovation performance of a firm. This in turn changes a firm’s incentives to invest in innovation. The paper studies circumstances where, comparing two firms where one has a technology weaker than the other (ranked lower in the technology comparison), the impact on the technologically weaker firm of such policy is either more or less severe than on the strong firm. In each case the consequence for investment in innovation is examined. The welfare implications of such policies are also considered. One feature of the paper is that the formulation allows for a broad and multidimensional description of technologies.
Industry dynamics with stochastic demand, James Bergin and Dan Bernhardt
Industry dynamics with stochastic demand, James Bergin and Dan Bernhardt
The Rand Journal of Economics.
We study the dynamics of an industry subject to aggregate demand shocks where the productivity of a firm's technology evolves stochastically over time. To characterize the intertemporal evolution of the distribution of firms, we discuss in particular how exit decisions, aggregate output, profits, and distributions of firm productivities vary (a) across different demand realization paths; (b) along a demand history path, detailing the effects of continued good or bad market conditions; and (c) for different anticipated future market conditions. We show how poor demand conditions can lead to increased exit of low-productivity firms at all future dates and states and raise welfare due to the impact on exit decisions.
Monotonic assignment rules and common pricing, James Bergin and Lin Zhou
Monotonic assignment rules and common pricing, James Bergin and Lin Zhou
Mathematics of Operations Research.
In this paper we study the production and pricing of a good by a single supplier (such as a monopolist or government) under some given optimality criterion—for example, profit maximization or social benefit maximization. In general, this may require discriminatory pricing. The primary focus here is on the pricing policy and whether it is possible to achieve the same objective value with common pricing—where each individual acquiring the good pays the same price. We consider the case of declining (marginal) cost and show that for a large class of problems, optimality is achievable with common pricing. Because the environment is one of incomplete information, incentive and participation constraints are important restrictions on the problem. We frame the discussion in terms of interim expected utility. When ex post restrictions are considered, the problem is altered substantially, and the value of the objective may be lower under common pricing.
Common knowledge with monotone statistics
Common knowledge with monotone statistics
Econometrica
When individual statistics are aggregated through a strictly monotone function to an aggregate statistic, common knowledge of the value of the aggregate statistic does not imply, in general, that the individual statistics are either equal or constant. This paper discusses circumstances where constancy and equality both hold. The first case arises when partitions are independently drawn, and each individual's information is determined by their own partition and some public signal. In this case common knowledge of the value of the aggregator function implies (with probability one) that the individual statistics are constant, so that in the case where the individual statistics have the same expected value, they must all be equal. The second circumstance is where private statistics are related: affiliation of individual statistics and a lattice condition imply that the individual statistics are equal when the value of the aggregate statistic is common knowledge.
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