nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2011‒09‒05
five papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Trading and Enforcing Patent Rights By Alberto Galasso; Mark Schankerman; Carlos J. Serrano
  2. Rankings Games By Bruno S. Frey; Margit Osterloh
  3. Entrepreneurship, technology and change: a review and proposal for an interpretative framework By Lucio Cassia; Tommaso Minola; Stefano Paleari
  4. Spatial Competition in Quality, Demand-Induced Innovation, and Schumpeterian Growth By Raphael Anton Auer; Philip Ulrich Sauré
  5. Olson’s Paradox Revisited: An Empirical Analysis of Incentives to Contribute in P2P File-sharing Communities. By Thierry Pénard, University of Rennes 1 - CREM-CNRS; Sylvain Dejean, CREM-CNRS, Marsouin; Raphaël Suire, University of Rennes 1 - CREM-CNRS

  1. By: Alberto Galasso; Mark Schankerman; Carlos J. Serrano
    Abstract: We study how the market for innovation affects enforcement of patent rights. Conventional wisdom associates the gains from trade with comparative advantage in manufacturing or marketing. We show that these gains imply that patent transactions should increase litigation risk. We identify a new source of gains from trade, comparative advantage in patent enforcement, and show that transactions driven by this motive should reduce litigation. Using data on trade and litigation of individually-owned patents in the U.S., we exploit variation in capital gains tax rates as an instrument to identify the causal effect of trade on litigation. We find that taxes strongly affect patent transactions, and that reallocation of patent rights reduces litigation risk, on average. The impact of trade on litigation is heterogeneous, however. Patents with larger potential gains from trade are more likely to change ownership, suggesting that the market for innovation is efficient. We also show that the impact of trade on litigation depends on characteristics of the transactions.
    Keywords: patents, litigation, market for innovation, capital gains taxation
    JEL: K41 H24 O32 O34
    Date: 2011–08
  2. By: Bruno S. Frey; Margit Osterloh
    Abstract: Research rankings based on publications and citations today dominate governance of academia. Yet they have unintended side effects on individual scholars and academic institutions and can be counterproductive. They induce a substitution of the "taste for science" by a "taste for publication". We suggest as alternatives careful selection and socialization of scholars, supplemented by periodic self-evaluations and awards. Neither should rankings be a basis for the distributions of funds within universities. Rather, qualified individual scholars should be supported by basic funds to be able to engage in new and unconventional research topics and methods.
    Keywords: Academic governance; rankings; motivation; selection; socialization
    JEL: A10 D02 H83 L23 M50
    Date: 2011–08
  3. By: Lucio Cassia; Tommaso Minola; Stefano Paleari
    Abstract: The objective of this article is to analyze the relationship between entrepreneurship and change in technological domains, with the focus on possible causal relations in both directions. It aims at investigating how technological changes generate opportunities that entrepreneurs or entrepreneurial organizations can properly exploit, and shedding light on how entrepreneurial behavior can be a promoter of change in both technology-intensive and technology-adopting businesses. Finally, we contribute to the literature on technology entrepreneurship by suggesting an explicit theoretical relationship between innovation dynamics (or techniques) and the entrepreneurial behavior of firms.
    Keywords: technology entrepreneurship, technological change, knowledge-base innovation, entrepreneurial orientation
    Date: 2011
  4. By: Raphael Anton Auer; Philip Ulrich Sauré
    Abstract: We develop a general equilibrium model of vertical innovation in which multiple firms compete monopolistically in the quality space. The model features many firms, each of which holds the monopoly to produce a unique quality level of an otherwise homogenous good, and consumers who are heterogeneous in their valuation of the good's quality. If the marginal cost of production is convex with respect to quality, multiple rms coexist, and their equilibrium markups are determined by the degree of convexity and the density of quality-competition. To endogenize the latter, we nest this industry setup in a Schumpeterian model of endogenous growth. Each firm enters the industry as the technology leader and successively transits through the product cycle as it is superseded by further innovations. The intrinsic reason that innovation happens in our economy is not one of displacing the incumbent; rather, innovation is a means to di-erentiate oneself from existing firms and target new consumers. Aggregate growth arises if, on the one hand, increasingly wealthy consumers are willing to pay for higher quality and, on the other hand, private firms' innovation generates income growth by enlarging the set of available technologies. Because the frequency of innovation determines the toughness of product market competition, in our framework, the relation between growth and competition is reversed compared to the standard Schumpeterian framework. Our setup does not feature business stealing in the sense that already marginal innovations grant non-negligible prots. Rather, innovators sell to a set of consumers that was served relatively poorly by pre-existing firms. Nevertheless, "creative destruction" prevails as new entrants make the set of available goods more di-erentiated, thereby exerting a pro-competitive e-ect on the entire industry.
    Date: 2011
  5. By: Thierry Pénard, University of Rennes 1 - CREM-CNRS; Sylvain Dejean, CREM-CNRS, Marsouin; Raphaël Suire, University of Rennes 1 - CREM-CNRS
    Abstract: This article aims to examine how the size of file-sharing communities affects their functioning and performance (i.e. their capacity to share content). Olson (1965) argued that small communities are more able to provide collective goods. Using an original database on BitTorrent file-sharing communities, our article finds a positive relationship between the size of a community and the amount of collective goods provided. But, the individual incentives to contribute slightly decrease with community size. These results seem to indicate that Peer to Peer file-sharing communities provide a pure (non rival) public good. We also show that specialized communities are more efficient than general communities to promote cooperative behavior. Finally, the rules designed by the administrators of these communities play an active role to manage voluntary contributions and improve file-sharing performance.
    Keywords: Olson’s paradox, collective goods, Peer-to-Peer, File-sharing, community
    JEL: H41 L86 K42
    Date: 2011–08

This nep-ipr issue is ©2011 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.