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on Contract Theory and Applications |
| By: | David Alary (LERNA - Laboratoire d'Economie des ressources Naturelles - INRA - Institut National de la Recherche Agronomique); Franck Bien (LEDa - Laboratoire d'Economie de Dauphine - CNRS - Centre National de la Recherche Scientifique - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine) |
| Abstract: | In this note, we consider an adverse selection problem involving an insurance market à la Rothschild-Stiglitz. We assume that part of the loss is uninsurable as in the case with health care or environmental risk. We characterize sufficient conditions such that adverse selection by itself does not distort competitive insurance contracts. A sufficiently large uninsurable loss provides an incentive to high-risk policy holders not to mimic low-risk policy holders without distorting the optimal coverage. |
| Keywords: | Adverse Selection,Background risk,Optimal Contract |
| Date: | 2019–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02390017&r=all |
| By: | Paul Belleflamme; Wing Man Wynne Lam; Wouter Vergote |
| Abstract: | Two duopolists compete in price on the market for a homogeneous product. They can ‘profile’ consumers, i.e., identify their valuations with some probability. If both firms can profile consumers but with different abilities, then they achieve positive expected profits at equilibrium. This provides a rationale for firms to (partially and unequally) share data about consumers, or for data brokers to sell different customer analytics to competing firms. Consumers prefer that both firms profile exactly the same set of consumers, or that only one firm profiles consumers, as this entails marginal cost pricing (so does a policy requiring list prices to be public). Otherwise, more protective privacy regulations have ambiguous effects on consumer surplus. |
| Keywords: | price discrimination, price dispersion, Bertrand competition, privacy, big data |
| JEL: | D11 D18 L12 L86 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7964&r=all |
| By: | Arina Gorbatyuk; Adrián Kovács |
| Abstract: | The most commonly provided economic rationale for the patent system is that it incentivizes inventive effort that may not be carried out in its absence. In addition to this utilitarian rationale, economic and legal scholars often refer to a second rationale that underlies the patent system – the dissemination of technological information to the public. This notice function is thought of as an important mechanism to enable a more efficient investment in innovation by stimulating further (cumulative) innovation, reducing wasteful duplicate innovative effort and limiting unnecessary litigation. Consequently, courts have placed a great deal of emphasis on the notice function and have described it as the ’quid pro quo’ of granting patent owners the right to exclude. Whereas the notice function is traditionally confined to the adequate disclosure of inventions, we propose that in light of the recent trend towards rapidly growing markets for patent monetization it should also encompass the adequate disclosure of the holders of rights to a patent. Specifically, in this paper we argue that in addition to knowing in detail the boundaries that define a claimed invention, knowing the identity of the parties that hold rights to this invention is a fundamental prerequisite for any patent transaction to occur. Based on a comparative analysis of the provisions of six of the most proficient patent offices worldwide, we illustrate that although current provisions warrant an adequate disclosure of the identity of the initial patent applicant(s), they provide the public with only limited opportunities to identify and track subsequent changes of ownership. Although most patent authorities require parties to file notice when the rights to a patent are assigned, provisions for strictly enforcing this requirement are absent. This allows for a lack of transparency concerning patent ownership, which may hamper rather than facilitate technology transactions. |
| Keywords: | Patent Disclosure, Patent Assignments, Markets for Technology, Patent Monetization |
| Date: | 2019–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:638326&r=all |