nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2008‒02‒23
seven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Open Source Licensing in Mixed Markets, or "Why Open Source Software Does Not Succeed" By Alexia Gaudeul
  2. The Ethnic Composition of US Inventors By William R. Kerr
  3. Ethnic Scientific Communities and International Technology Diffusion By William R. Kerr
  4. A Real Options Perspective on R&D Portfolio Diversification By Sjoerd van Bekkum; Enrico Pennings; Han Smit
  5. Dynamic Efficiency of Product Market Competition By Jeroen Hinloopen; Jan Vandekerckhove
  6. End-Point versus Point of Sale Levying of Plant Breeding Royalties: An Economic Analysis using Optimal Control Theory By Beard, Rodney
  7. Can Social Norms Affect the International Allocation of Innovation? By Guido Cozzi

  1. By: Alexia Gaudeul (School of Economics and Centre for Competition Policy, University of East Anglia)
    Abstract: The rivalry between developers of open source and proprietary software encourages open source developers to court users and respond to their needs. The open source developer who wants to promote her code (intrinsic motivations) may choose liberal license terms such as those of the Berkeley Software Distribution as they allow the proprietary developer to use her code in his product and thus broaden its appeal. If she wants to promote her own implementation of her software (extrinsic motivations), she may use more restrictive license terms such as the General Public License to discourage proprietary exploitation of her code. An open source developer who is a latecomer to the market will be less likely than an early entrant to make her product compatible with that of the proprietary developer, but she is also more likely to orient her software towards the end user.
    Keywords: open source, software, standards, compatibility, network effects, duopoly, mixed markets, production systems, non profits, volunteer organizations, information goods, intellectual property, copyright, licensing
    JEL: D23 H41 L13 L22 L31 L86 O34 O38
    Date: 2008–02
  2. By: William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: The ethnic composition of US scientists and engineers is undergoing a significant transformation. This study applies an ethnic-name database to individual patent records granted by the United States Patent and Trademark Office to document these trends with greater detail than previously available. Most notably, the contributions of Chinese and Indian scientists to US technology formation increase dramatically in the 1990s, before noticeably leveling off after 2000 and declining in the case of India. Growth in ethnic innovation is concentrated in high-tech sectors; the institutional and geographic dimensions are further characterized.
    Keywords: Innovation, Research and Development, Patents, Scientists, Engineers, Inventors, Ethnicity, Immigration.
    JEL: F15 F22 J44 J61 O31
    Date: 2007–08
  3. By: William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: This study explores the importance of knowledge transfer for international technology diffusion by examining ethnic scientific and entrepreneurial communities in the US and their ties to their home countries. US ethnic research communities are quantified by applying an ethnic-name database to individual patent records. International patent citations con.rm knowledge diffuses through ethnic networks, and manufacturing output in foreign countries increases with an elasticity of 0.1-0.3 to stronger scientific integration with the US frontier. To address reverse-causality concerns, reduced-form specifications exploit exogenous changes in US immigration quotas. Consistent with a model of sector reallocation, output growth in less developed economies is facilitated by employment gains, while more advanced economies experience sharper increases in labor productivity. The ethnic transfer mechanism is especially strong in high-tech industries and among Chinese economies. The findings suggest channels for transferring codified and tacit knowledge partly shape the effective technology frontiers of developing and emerging economies.
    Keywords: Technology Transfer, Tacit Knowledge, Productivity, Patents, Innovation, Research and Development, Entrepreneurship, Immigration, Networks.
    JEL: F22 J44 J61 O31 O32 O33 O41 O57
    Date: 2005–11
  4. By: Sjoerd van Bekkum (Erasmus University Rotterdam); Enrico Pennings (Erasmus University Rotterdam); Han Smit (Erasmus University Rotterdam)
    Abstract: This paper shows that the presence of conditional staging in R&D (Research & Development) has a critical impact on portfolio risk, and changes diversification arguments when a portfolio is constructed. When R&D projects exhibit option-like characteristics, correlation between projects plays a more complicated role than traditional portfolio diversification would suggest. Real option theory argues that research projects with conditional phases have option-like risk and return properties, and are different from unconditional projects. We show that although the risk of a portfolio always depends on the correlation between projects, a portfolio of conditional R&D projects with real option characteristics has fundamentally different risk than a portfolio of unconditional projects. When conditional R&D projects are negatively correlated, portfolio risk is hardly reduced by diversification. When projects are positively correlated, however, diversification is more effective than these tools predict.
    Keywords: Real Options; Research & Development (R&D); Risk Management; Monte Carlo Simulation
    JEL: G31 G32 O30 O32
    Date: 2007–01–15
  5. By: Jeroen Hinloopen (Universiteit van Amsterdam, and Katholieke Universiteit Leuven); Jan Vandekerckhove (Kath. Universiteit Leuven)
    Abstract: We consider the efficiency of Cournot and Bertrand equilibria in a duopoly with substitutable goods where firms invest in process R&D. Under Cournot competition firms always invest more in R&D than under Bertrand competition. More importantly, Cournot competition yields lower prices than Bertrand competition when the R&D production process is efficient, when spillovers are substantial, and when goods are not too differentiated. The range of cases for which total surplus under Cournot competition exceeds that under Bertrand competition is even larger as competition over quantities always yields the largest producers' surplus.
    Keywords: Bertrand competition; Cournot competition; process R&D; efficiency
    JEL: L13
    Date: 2007–12–17
  6. By: Beard, Rodney
    Abstract: Intellectual property rights for commercial crops have become in- creasingly controversial as plant breeders have sought to protect their investment through licensing and royalties, and farmers, in particular ecologically-oriented farmers, have promoted seed-saving as a conser- vation measure. Plant breeders have argued that seed saving reduces sales to breeders and that the imposition of royalties is necessary to maintain sales and to compensate them for the intellectual property invested in commercial varieties. These issues are explored here. In this paper, an optimal control model of seed purchase decisions in the presence of seed saving is developed. The model is used to analyze the impact of both point of sale royalties and end-point royalties on seed puchase decisions. The two approaches to levying royalties are then compared and policy conclusions drawn.
    Keywords: Agricultural economics; plant breeding; intellectual property; royalties
    JEL: Q16 C61 Q12
    Date: 2008–02–15
  7. By: Guido Cozzi
    Abstract: If economic agents coordinate on social norms more oriented towards the protection of national industries, an asymmetric in- ternational specialization in the research and development (R&D) arises even in a tariff free world with no a priori differences across countries in endowments, demography or technology. This paper exploits the indifference in the composition of R&D expenditure across sectors of the typical multi-sector Schumpeterian framework (forward-looking decisions, CRS R&D technology and free entry) to construct a theory of the international allocation of innovation and education based on sunspot equilibrium. A role for industrial policies as mere coordination devices emerges in an international Schumpeterian framework. The implications for the relationships between inequality and growth are examined.
    Keywords: Schumpeterian Growth Theory, Inequality, International Trade, Social Norms, Indeterminacy, Sunspots.
    JEL: O41 O32 D33 F43

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