nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒01‒23
eight papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  2. Disclosing vs. withholding technology knowledge in a duopoly By Paolo Giorgio GARELLA; Emanuele BACCHIEGA
  3. The inventor's role: was Schumpeter right? By Braunerhjelm, Pontus; Svensson, Roger
  4. Innovation Policy: Europe or the Member States? By Albert van der Horst; Arjan Lejour; Bas Straathof
  5. The Economics of Ideas and the Ideas of Economists By William R. Johnson
  6. International Comparisons of R&D Expenditure: Does an R&D PPP Make a Difference? By Sean M. Dougherty; Robert Inklaar; Robert H. McGuckin; Bart van Ark
  7. The Return to Knowledge Hierarchies By Luis Garicano; Thomas N. Hubbard
  8. Tutkimus- ja tuotekehitysinvestointien verotuki By Tarmo Valkonen

  1. By: William R. Johnson
    Abstract: Technological changes over the past two decades have made it easier to distribute and to copy intellectual property. Creators and owners of intellectual property have responded to these changes with a variety of creative pricing strategies. The paper reviews some of these pricing innovations. Two broad categories of innovations are explored: those that facilitate price discrimination and those that exploit complementarities between di¤erent types of creative works.
    Keywords: pricing, intellectual property
    JEL: D4 O34
    Date: 2005–04
  2. By: Paolo Giorgio GARELLA; Emanuele BACCHIEGA
    Abstract: We study firms' incentives to transfer knowledge about production technology to a rival in a Cournot duopoly. In a setting where two technologies are available, a technology is characterized by its associated cost function and no single technology is strictly superior to the other. A firm has superior information if it knows both techniques and the other only one. Cost efficiency may be "reversed" after the voluntary disclosure, so that the rival's costs are improved at the equilibrium level of output. Adding R&D investments to the picture, we find that a firm can decide to invest just for the purpose of acquiring knowledge that will be transferred and not used. Furthermore, for the same point in the parameters space, the acquisition of full knowledge may occur or not as a function of the initial distribution of information
    Keywords: Oligopoly, Information disclosure, R&D Joint Ventures, R&D Consortia, Returns to scale
    JEL: L13 O30
    Date: 2007–01
  3. By: Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Svensson, Roger (Research Institute of Industrial Economics)
    Abstract: According to Schumpeter, the creative process of economic development can be divided into three distinguishable stages of invention, innovation (commercialization) and imitation. We show why there is a rationale for the Schumpeterian entrepreneur to also include the inventor in the innovation process. In addition, we provide a framework where the theories of Knight’s risk defining entrepreneur and Schumpeter’s innovative entrepreneur can be bridged. Merging the two enhances the possibilities of successful commercialization since the inventor may further adapt the innovation to customer needs, transmit information and reduce uncertainty. This serves to expand the market opportunities for the entrepreneur. The empirical analysis is based on a survey covering Swedish patents granted to individuals and small firms, with a response rate of 80 %. The results show improved commercialization performance when the patent is licensed or sold to an entrepreneur, or if the inventor is employed in an entrepreneurial firm, as compared to commercialization in the inventor’s own firm. Another important result is that, irrespective of commercialization mode, an active involvement of the inventor is shown to have a positive impact on performance.
    Keywords: Entrepreneur; inventor; innovations; commercialization
    JEL: M13 O31 O32
    Date: 2007–01–17
  4. By: Albert van der Horst; Arjan Lejour; Bas Straathof
    Abstract: Innovation seldom has purely domestic causes and consequences, but how can a European innovation policy complement or substitute national policies? Taking the subsidiarity principle as a starting point, this report discusses the economic rationale of a European innovation policy. Explorative empirical analysis suggests that public R&D and public funding of private R&D are subject to economies of scale and external effects. This is an argument in favour of a European innovation policy but amongst other things, the heterogeneity in social economic objectives on public R&D spending between Member States pleas for national government involvement. In addition, there are scale economies in the protection of intellectual property and in the development of standards. We conclude that a European innovation policy could have, or already has, substantial benefits over purely national policy in these areas. With respect to innovation policies targeted at SMEs, we do not find economies of scale or external effects. It seems to be efficient that these policies are mainly conducted at the national level.
    Keywords: innovation policy; subsidiarity; European Union
    JEL: O38 H77 H87 F15
    Date: 2006–11
  5. By: William R. Johnson
    Abstract: On college campuses across the country and on millions of home computers, too, young adults download from each other digital files containing recorded music and films for their entertainment. The owners of that copyrighted material pursue the downloaders with legal action as well as the software services that facilitate it. Napster’s existence as a free file-sharing internet site was shut down in 2001, and the Supreme Court has recently ruled that a successor file-sharing service, Grokster, engaged in copyright infringement by providing an easy way for individuals to exchange files. The amount of filesharing activity is not trivial; Paul Romer (2002) estimates that Napster users were downloading at the rate of 1.5 billion downloads per month before Napster was shut down and that the consumer surplus generated by downloading roughly equaled the revenues of the recording industry.
    Keywords: Intellectual Property, property rights, creativity
    JEL: D8 O34 O38 Z11
    Date: 2005–11
  6. By: Sean M. Dougherty; Robert Inklaar; Robert H. McGuckin; Bart van Ark
    Abstract: Purchasing power parities (PPPs) for R&D expenditure in 19 manufacturing industries are developed for France, Germany, Japan, the Netherlands and the United Kingdom relative to the United States for the years 1997 and 1987. These PPPs are based on R&D input prices for specific cost categories and differ substantially from current practice of comparing R&D expenditure using GDP PPPs and deflators. After taking into account differences in the relative price of R&D labor and materials, separate PPPs for other R&D cost categories are less essential, and a simpler version using GDP PPPs for these other categories should suffice. Our preferred PPPs are used to compare international R&D costs and intensity. The results suggest that the efforts devoted to R&D in each country are more similar across countries than is apparent using the nominal R&D intensities that are currently the norm.
    JEL: C43 L16 L60 O32 O47
    Date: 2007–01
  7. By: Luis Garicano; Thomas N. Hubbard
    Abstract: Hierarchies allow individuals to leverage their knowledge through others' time. This mechanism increases productivity and amplifies the impact of skill heterogeneity on earnings inequality. To quantify this effect, we analyze the earnings and organization of U.S. lawyers and use the equilibrium model of knowledge hierarchies in Garicano and Rossi-Hansberg (2006) to assess how much lawyers' productivity and the distribution of earnings across lawyers reflects lawyers' ability to organize problem-solving hierarchically. We analyze earnings, organizational, and assignment patterns and show that they are generally consistent with the main predictions of the model. We then use these data to estimate the model. Our estimates imply that hierarchical production leads to at least a 30% increase in production in this industry, relative to a situation where lawyers within the same office do not "vertically specialize." We further find that it amplifies earnings inequality, increasing the ratio between the 95th and 50th percentiles from 3.7 to 4.8. We conclude that the impact of hierarchy on productivity and earnings distributions in this industry is substantial but not dramatic, reflecting the fact that the problems lawyers face are diverse and that the solutions tend to be customized.
    JEL: D24 J24 J31 J44 L23 L84
    Date: 2007–01
  8. By: Tarmo Valkonen
    Abstract: TAX INCENTIVES OF R&D It is popular to promote private R&D investments with tax credits or tax allowances in the OECD countries. This report depicts the justifications and criteria presented in economic literature, which should be used when decisions about tax incentives are made. The main argument is that firms do not consider all the social welfare gains, when they decide about an R&D investment. Another linked justification is that the production based on the innovation may be too small, because the firm must finance the sunken costs generated both by the failed and the successful trials, and sell with a price that is higher than the marginal costs. On the other hand, there are also negative externalities involved in R&D investments. Moreover, introduction of a tax incentive necessitates that the welfare gain generated is sufficient to cover the losses due to the marginal costs of public funds, which appear due to the lost tax revenues. The report concludes that there are well-founded theoretical reasons for promoting private R&D investments with public funds, but the optimal scale and the best methods, such as choice between direct support and tax incentives, are questions to be solved by empirical studies.
    Keywords: research and development investments, tax incentives
    JEL: H25 O1 O4
    Date: 2007–01–11

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