nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2010‒08‒14
four papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Essential Patents and Coordination Mechanisms By Justus Baron; Tim Pohlmann
  2. Agent-Based Simulations of the Software Market under Different Pricing Schemes for Software-as-a-Service and Perpetual Software By Juthasit Rohitratana; Jorn Altmann
  3. Trust with Private and Common Property: Effects of Stronger Property Right Entitlements By James C. Cox; Daniel T. Hall
  4. The Case for Liberal Spectrum Licenses: A Technical and Economic Perspective By Leo, Evan; Hazlett, Thomas W.

  1. By: Justus Baron (CERNA - Centre d'économie industrielle - Mines ParisTech); Tim Pohlmann (Chair of Innovation Economics - Berlin University of Technology)
    Abstract: This article investigates the interplay between formal standards, essential patents and informal industry alliances such as consortia and patent pools. Building upon more than 6.200 declarations of essential patents to major international Standard Development Organizations (SDO), we investigate how informal standardization consortia and patent pools influence the number and timing of patent declarations to formal SDOs. This is the first thorough empirical investigation of the effectiveness of industry-driven coordination mechanisms addressing the problems raised by the high number of patents. We find that patent pools increase the number of declared essential patents controlling for the effects of standardization. On the other hand, informal consortia reduce the number of patent declarations at given standardization activity. These findings confirm results in the literature that patent pools provide incentives for strategic patent files and that informal standardization consortia have a regulatory function on the firms' patent strategies.
    Date: 2010
  2. By: Juthasit Rohitratana; Jorn Altmann (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)
    Abstract: In this paper, we present agent-based simulations that model the interactions between software buyers and vendors in a software market that offers Software-as-a-Service (SaaS) and perpetual software (PS) licensing under different pricing schemes. In particular, scenarios are simulated, in which vendor agents dynamically set prices. Customer (or buyer) agents respond to these prices by selecting the software license scheme according to four fundamental criteria using Analytic Hierarchy Process (AHP) as decision support mechanism. These criteria relate to finance, software capability, organization, and vendor. Three pricing schemes are implemented for our simulations: derivative-follower (DF), demand-driven (DD), and competitor-oriented (CO). The results show that DD scheme is the most effective method but hard to implement since it requires perfect knowledge about market conditions. This result is supported through a price sensitivity analysis
    Keywords: Software-as-a-Service pricing, perpetual software pricing, agent-based simulation, Analytic Hierarchy Process (AHP), dynamic pricing, decision support
    JEL: C02 C15 C61 C63 D40 D81 D83 L11 L14 L23 L86 M21
    Date: 2010–07
  3. By: James C. Cox; Daniel T. Hall
    Abstract: Is mutually beneficial cooperation in trust games more prevalent with private property or common property? Does the strength of property right entitlement affect the answer? Cox, Ostrom, Walker, et al. [1] report little difference between cooperation in private and common property trust games. We assign stronger property right entitlements by requiring subjects to meet a performance quota in a real effort task to earn their endowments. We find that cooperation is lower in common property trust games than in private property trust games, which is an idiosyncratic prediction of revealed altruism theory [2].
    Date: 2010–08
  4. By: Leo, Evan; Hazlett, Thomas W.
    Abstract: The traditional system of radio spectrum allocation has inefficiently restricted wireless services. Alternatively, liberal licenses ceding de facto spectrum ownership rights yield incentives for operators to maximize airwave value. These authorizations have been widely used for mobile services in the U.S. and internationally, leading to the development of highly productive services and waves of innovation in technology, applications and business models. Serious challenges to the efficacy of such a spectrum regime have arisen, however. Seeing the widespread adoption of such devices as cordless phones and wi-fi radios using bands set aside for unlicensed use, some scholars and policy makers posit that spectrum sharing technologies have become cheap and easy to deploy, mitigating airwave scarcity and, therefore, the utility of exclusive rights. This paper evaluates such claims technically and economically. We demonstrate that spectrum scarcity is alive and well. Costly conflicts over airwave use not only continue, but have intensified with scientific advances that dramatically improve the functionality of wireless devices and so increase demand for spectrum access. Exclusive ownership rights help direct spectrum inputs to where they deliver the highest social gains, making exclusive property rules relatively more socially valuable. Liberal licenses efficiently accommodate rival business models (including those commonly associated with unlicensed spectrum allocations) while mitigating the constraints levied on spectrum use by regulators imposing restrictions in traditional licenses or via use rules and technology standards in unlicensed spectrum allocations.
    Date: 2010–03

This nep-ipr issue is ©2010 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.