nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2006‒11‒12
eleven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. The Hidden Surplus From Research Joint Ventures: An Application Of Systems Reliability Theory By Manfredi M.A. La Manna 
  2. Heterogeneity and the Dynamics of Technology Adoption By Stephen Ryan; Catherine Tucker
  3. Information Use and Transference By Jack Ochs; Li Qi
  4. How Do Mobile Information Technology Networks Affect Firm Strategy and Performance? Firm-Level Evidence from Taxicab Fleets By Evan Rawley
  5. When Proof of Work Works By Debin Liu; L. Jean Camp
  6. Paid Placement: Advertising and Search on the Internet By Yongmin Chen; Chuan He
  7. What’s It To You? A Survey of Online Privacy Concerns and Risks By Janice Tsai; Lorrie Cranor; Alessandro Acquisti; Christina Fong
  8. On the Impact of Practical P2P Incentive Mechanisms on User Behavior By Kostas G. Anagnostakis; Fotios C. Harmantzis; Sotiris Ioannidis; Manaf Zghaibeh
  9. Bandwidth Allocation in Peer-to-Peer File Sharing Networks By Albert Creus Mir; Ramon Casadesus-Masanell; Andres Hervas-Drane
  10. The Impact on Broadband Access to the Internet of the Dual Ownership of Telephone and Cable Networks By Pedro Pereira; Tiago Ribeiro
  11. An Empirical Analysis of Indirect Network Effects in the Home Video Game Market By James E. Prieger; Wei-Min Hu

  1. By: Manfredi M.A. La Manna 
    Abstract: The paper’s aim is two fold: (a) to model some key features of the research process as a multi-component system, as understood by the mathematical theory of systems reliability; and (b) to apply the resulting model to Research Joint Ventures, showing that a potentially very large surplus can be realized purely by organizing research efficiently, i.e. even without any changes in R&D investment.
    Keywords: optimal organization, systems reliability, Research Joint Ventures, parallel and series systems, majorization, organizational surplus.
    JEL: O32
    Date: 2006–11
  2. By: Stephen Ryan (MIT and NBER); Catherine Tucker (MIT Sloan School of Business)
    Abstract: This paper analyzes the role of heterogeneity and forward-looking expectations in the diffusion of network technologies. Using a detailed dataset on the adoption of a new videoconferencing technology within a firm, we estimate a structural model of technology adoption and communications choice. We allow for heterogeneity in network benefits and adoption costs across agents. We find that ignoring heterogeneity in the interplay between adoption costs and network effects will underpredict the size of the steady-state network size by almost 50 percent. We develop a new “simulated sequence estimator” to measure the extent to which agents seek diversity in their calling behavior, and characterize the patterns of communication as a function of geography, job function, and rank within the firm. We find that agents have significant welfare gains from having access to a diverse network, and that a policy of strategically targeting the right subtype for initial adoption can lead to a faster-growing and larger network than a policy of uncoordinated or diffuse adoption.
    Date: 2006–10
  3. By: Jack Ochs; Li Qi
    Date: 2006–01
  4. By: Evan Rawley (University of California, Berkeley)
    Abstract: This paper examines how the adoption of mobile information technology networks impact firm strategy and performance in the U.S. taxicab industry. Using a rich, novel firm-level data set from the Economic Census, I test transaction cost economics’ prediction that adoption of mobile IT networks leads to shifts in the boundary of the firm toward increased fleet ownership of vehicles. I then exploit the homogeneity of the industry’s production function and exogenous variation in local market conditions to precisely measure the impact of adoption of mobile IT networks on productivity. I find strong evidence that firms respond to adoption of mobile IT networks by changing their organizational structure, shifting toward owning a greater fraction of vehicles in their fleets (as opposed to contracting with independent driver-owners for vehicles). I then use a precise and economically meaningful measure of firm performance to show that adoption of mobile IT networks causes firms to become more productive. The results suggest that adoption of mobile IT networks increases asset utilization by improving within-firm coordination but that firms must simultaneously shift toward a more highly vertically integrated structure to fully capture the benefits of mobile IT networks.
    Date: 2006–10
  5. By: Debin Liu (School of Informatics, Indiana University); L. Jean Camp (School of Informatics, Indiana University)
    Abstract: Proof of work (POW) is a set of cryptographic mechanisms which increase the cost of initiating a connection. Currently recipients bear as much or more cost per connection as initiators. The design goal of POW is to reverse the economics of connection initiation on the Internet. In the case of spam, the first economic examination of POW argued that POW would not, in fact, work. This result was based on the difference in production cost between legitimate and criminal enterprises. We illustrate that the difference in production costs enabled by zombies does not remove the efficacy of POW when work requirements are weighted. We illustrate that POW will work with a reputation system modeled on the systems currently used by commercial anti-spam companies. We also discuss how the variation on POW changes the nature of corresponding proofs from token currency to a notational currency.
    Date: 2006–10
  6. By: Yongmin Chen (University of Colorado at Boulder); Chuan He (University of Colorado at Boulder)
    Abstract: Paid placement, where advertisers bid payments to a search engine to have their products appear next to keyword search results, has emerged as a predominant form of advertising on the Internet. This paper studies a product-di¤erentiation model where consumers are initially uncertain about the desirability of and valuation for di¤erent sellers? products, and can learn about a seller?s product through a costly search. In equilibrium, a seller bids more for placement when his product is more relevant for a given keyword, and the paid placement of sellers by the search engine reveals information about the relevance of their products. This results in e¢ cient (sequential) search by consumers and increases total output.
    Keywords: Paid placement, Advertising, Auction, E-commerce, Search
    Date: 2006–09
  7. By: Janice Tsai (Carnegie Mellon University); Lorrie Cranor (Carnegie Mellon University); Alessandro Acquisti (Carnegie Mellon University); Christina Fong (Carnegie Mellon University)
    Abstract: Finding information about privacy practices can be difficult: privacy policies often do not present this information in an accessible way. People typically do not know how or for what purpose their personal information, gathered online, will be used. When asked, people frequently express concerns about their privacy, but their behavior often does not reflect their concerns. We conducted an online survey to examine participants’ online privacy concerns, focusing especially on the online shopping context. We asked participants about several scenarios related to the privacy of personal information. We found that Privacy Finder, a P3Penhanced search engine, provides information that addresses the scenarios that participants believe are most likely to occur. We also asked participants about a wide range of items for purchase online to evaluate which types of items are more likely to raise privacy concerns.
    Date: 2006–10
  8. By: Kostas G. Anagnostakis (Institute for Infocomm Research); Fotios C. Harmantzis (Stevens Institute of Technology); Sotiris Ioannidis (Stevens Institute of Technology); Manaf Zghaibeh (Stevens Institute of Technology)
    Abstract: In this paper we report on the results of a large-scale measurement study of two popular peer-topeer systems, namely BitTorrent and eMule, that use practical and lightweight incentive mechanisms to encourage cooperation between users. We focus on identifying the strategic behavior of users in response to those incentive mechanisms. Our results illustrate a gap between what system designers and researchers expect from users in reaction to an incentive mechanism, and how users react to those incentives. In particular, we observe that the majority of BitTorrent users appear to cooperate well, despite the existence of known ways to tamper with the incentive mechanism, users engaging in behavior that could be regarded as cheating comprised only around 10% of BitTorrent’s population. That is, although we know that users can easily cheat, they actually do not currently appear to cheat at a large enough scale. In the eMule system, we identify several distinct classes of users based on their behavior. A large fraction of users appears to perceive cooperation as a good strategy, and openly share all the files they obtained. Other users engage in more subtle strategic choices, by actively optimizing the number and types of files they share in order to improve their standing in eMule’s waiting queues; they tend to remove files for which downloading is complete and keep a limited total volume of files shared.
    Date: 2006–09
  9. By: Albert Creus Mir (Universitat Politecnica de Catalunya); Ramon Casadesus-Masanell (Harvard Business School); Andres Hervas-Drane (Universitat Autonoma de Barcelona)
    Abstract: We present a model of bandwidth allocation in a stylized peer-to-peer ¯le sharing net- work. Given an arbitrary population of peers composed of sharers and freeriders, where all peers interconnect to maximize their allocated bandwidth, we derive the expected band- width obtained by sharers and freeriders. We show that sharers are always better o® than freeriders and that the di®erence decreases as the size of the network grows. This paper con- stitutes a ¯rst step towards providing a general analytical foundation for resource allocation in peer-to-peer networks.
    Keywords: Peer-to-Peer, Network formation, Resource allocation, Congestion
    Date: 2006–10
  10. By: Pedro Pereira (Autoridade da Concorrencia, Portugal); Tiago Ribeiro (Indera)
    Abstract: In Portugal, the telecommunications incumbent o®ers broadband access to the Inter- net, both through digital subscriber line and cable modem. In this article, we estimate the impact on broadband access to the Internet of the structural separation of these two businesses. We use a panel of consumer level data and a discrete choice model to estimate the price elasticities of demand and the marginal costs of broadband access to the Internet. Based on these estimates, we simulate the e®ect on prices and social welfare of the structural separation. Our results indicate that the structural separation would lead to substantial price reductions. For broadband clients, on average, each household would save 3:37 euros per month, or 14% of the current price levels. Overall, on average, each household would save 2:73 euros per month, or 14% of the current price levels. We test the robustness of our results in terms of: (i) the estimates of the demand elasticities, (ii) the strategic behavior of the ¯rms, and (iii) the market share estimates. There is no evidence of collusion.
    Keywords: Broadband, Structural Separation, Prices
    JEL: L25 L51 L96
    Date: 2006–08
  11. By: James E. Prieger (Pepperdine University); Wei-Min Hu (University of California, Davis)
    Abstract: We explore the indirect network effect in the market for home video games. We examine the video game console makers’ strategic choice between increasing demand by lowering console price and by encouraging the growth of software variety. We also explore the existence of an applications barrier to entry in the console market, and find that there is little evidence for such a barrier. Finally, we assess the applicability of the model to out-of-sample situations, to look at whether our model and previous similar models can generalize to other markets for purposes of marketing or antitrust inquiry. We find that the model generalizes reasonably well to the Japanese market for the same generation of gaming systems, but poorly to previous generations in the US market.
    Date: 2006–10

This nep-ipr issue is ©2006 by Roland Kirstein. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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