nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2009‒05‒02
six papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. On Competition and the Strategic Management of Intellectual Property in Oligopoly By Jos Jansen
  2. Technology diversification, product innovations, and technology transfer By Martin Woerter
  3. Technology proximity between firms and universities and technology transfer By Martin Woerter
  4. Incentives to Innovate and Social Harm: Laissez-Faire, Authorization or Penalties? By Immordino, Giovanni; Pagano, Marco; Polo, Michele
  5. Why tenure? By Cater, Bruce; Lew, Byron; Pivato, Marcus
  6. Innovation and Market Design By Peter Cramton

  1. By: Jos Jansen (Max Planck Institute for Research on Collective Goods)
    Abstract: An innovative firm chooses strategically whether to patent its process innovation or rely on secrecy. By doing so, the firm manages its rival’s beliefs about the size of the innovation, and affects the incentives in the product market. Different measures of competitive pressure in the product market have different effects on the equilibrium patenting choices of an innovative firm with unknown costs and probabilistic patent validity. Increasing the number of firms (degree of product substitutability) gives a smaller (greater) patenting incentive. Switching from Bertrand to Cournot competition gives a smaller (greater) patenting incentive if patent protection is weak (strong).
    Keywords: Bertrand and Cournot competition, oligopoly, product differentiation, entry, asymmetric information, strategic disclosure, stochastic patent, trade secret, process innovation, imitation
    JEL: D82 L13 O31 O32
    Date: 2009–04
  2. By: Martin Woerter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper investigates the relationship between technology specialization and innovation performance of firms emphasizing technology transfer activities with universities as an important knowledge source in order to attenuate the opportunity costs of technological specialization. Based on an econometric analysis combining patent data and survey data on technology transfer activities of firms it was found that technology transfer is positively related with the sales share of innovative products. Following the “technology trajectory (path)” increases the probability of an above average innovation performance. Taking into account the combined effects of transfer activities and technological specialization and in this way approximating the idea that transfer activities enable a firm to be specialized and keep the knowledge base broad and upto-date, we detect a significant positive relationship between the combined effect (transfer and specialization) and the innovation performance of a firm. Smaller firms tend to benefit more from the combination of technology specialization and transfer activities with universities compared to larger firms.
    Keywords: Innovation, Knowledge and Technology Transfer, Specialization, Diversification, Firms History
    Date: 2009–04
  3. By: Martin Woerter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper investigates the technological orientation of firms and universities and their propensity to have knowledge and technology transfer (KTT) activities. This study looks at the technological potential for KTT and how it is used, emphasizing differences between smaller and larger firms. To this end we collected information about the technology activities of firms (patent statistics) and the technology activities of universities. Furthermore we used survey data on technology transfer activities. We combined the three datasets and found – especially for smaller firms – that great technology proximity fosters transfer activities with different universities (case 1). The same is true, if proximity is low and expertise is considerable at universities in the respective technology field (case 2). In both cases additional transfer potential exists. In the second case firms engage in transfer activities in order to update and modifying their knowledge base and as a consequence improve “competitiveness” in certain technology fields. Furthermore firms show a tendency to diversify their contacts with universities in order to avoid knowledge lock-in.
    Keywords: Innovation, Knowledge and Technology Transfer, Technology Proximity, Universities, Firms
    Date: 2009–04
  4. By: Immordino, Giovanni; Pagano, Marco; Polo, Michele
    Abstract: We analyze optimal policy design when firms' research activity may lead to socially harmful innovations. Public intervention, affecting the expected profitability of innovation, may both thwart the incentives to undertake research (average deterrence) and guide the use to which innovation is put (marginal deterrence). We show that public intervention should become increasingly stringent as the probability of social harm increases, switching first from laissez-faire to a penalty regime, then to a lenient authorization regime, and finally to a strict one. In contrast, absent innovative activity, regulation should rely only on authorizations, and laissez-faire is never optimal. Therefore, in innovative industries regulation should be softer.
    Keywords: authorization; deterrence; innovation; liability for harm; safety regulation
    JEL: D73 K21 K42 L51
    Date: 2009–04
  5. By: Cater, Bruce; Lew, Byron; Pivato, Marcus
    Abstract: Academic research is a public good whose production is supported by the tuition-paying students that a faculty's research accomplishments attract. A professor's spot contribution to the university's revenues thus depends not on her spot research production, but rather on her cumulative research record. We show that a profit-maximizing university will apply a `high' minimum retention standard to the production of a junior professor who has no record of past research, but a `zero' retention standard to the spot production of a more senior professor whose background includes accomplishments sufficient to have cleared the `high' probationary hurdle.
    Keywords: academic tenure; labour contract; up-or-out
    JEL: J41 J31
    Date: 2009–01–17
  6. By: Peter Cramton (Economics Department, University of Maryland)
    Abstract: Market design plays an essential role in promoting innovation. I examine emission allowance auctions, airport slot auctions, spectrum auctions, and electricity markets, and demonstrate how the market design can encourage innovation. Improved pricing information is one source of innovation. Enhancing competition is another driver of innovation seen in all of the applications. Market design fosters innovation in other ways as well by addressing other potential market failures.
    Keywords: Auctions, market design, innovation
    JEL: D44
    Date: 2009

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