Losing the lead: the patenting decision in the light of the disclosure requirement

Empirical findings state that the disclosure requirement might be a reason for firms to rely on secrecy rather than patents to protect their inventions. We choose a dynamic framework in which we can explicitly analyze the patenting decision reflecting the tradeoff between a positive protective effect and a negative effect due to the required disclosure of the protected invention. In spite of a patent, the inventor's rival may still enter the market with a non-infringing product. Measuring the technological lead of the inventor by a time advantage he has compared with his rival, we show that if his headstart exceeds a critical threshold, he will not patent and rather rely on secrecy.     

Horizontal Mergers Under Asymmetric Information About Synergies

This paper analyses a situation in which there are three quantity‐setting firms, two of which are considering whether or not to merge. When these two firms have private information about the potential cost‐saving synergies of the merger, they may have an incentive to overstate them. This is because if they succeed in making the non‐merging rival firm believe that the synergies are high, the rival firm reduces output and the merger becomes more profitable. Under some conditions, anticipating that the rival will form such a belief, low‐synergy firms that would never merge under complete information will mimic high‐synergy firms by merging. Such pooling behaviour by the merging firms can have a negative impact on social welfare.     

Hayek and the Great Depression of 1929: Did he really change his mind?

The aim of this research is to establish whether, and if so in what way, Hayek changed his mind about the Great Depression of 1929.The work is divided into two parts. In the first part, I present the ‘early’ Hayek of the 1930s. Hayek was the great rival of Keynes. Both explained the Great Depression, applying opposing business cycle theories. For Keynes, the crisis was caused by an excess of saving over investment; for Hayek, on the contrary, by an excess of investment over saving. In the early 1930s, Röpke attempted a synthesis, positing that a recession due to overinvestment can degenerate, as in 1929, into a depression caused by oversaving. Hayek examined and rejected Röpke's theory. In the second part, I present the ‘later’ Hayek of the 1970s. After years of silence and solitude, Hayek was unexpectedly awarded the Nobel Memorial Prize in Economics, precisely for the contribution he made in the 1930s to the theory of the business cycle. Hayek returned to his pursuit of the ghost of Keynes, debated with his friend and rival Friedman, re-examined Röpke's special case and, according to Haberler, changed his mind. In my conclusion, I attempt to resolve the dilemma.     

A Note on Laurence Seidman’s Article

Mihail Manoilescu was among the foremost intellectual figures of the interwar period in Romania. He was known as a politician and central banker, as well as an economist. From the very beginning of his theoretical and practical career, or at least from the late 1920s onward, Manoilescu’s ideas and theories (especially his corporatist theory) were marked by clear continuity and consistency based on the theory of protectionism grounded on productivity differences. By developing his model — an alternative to the theory of comparative advantage — Manoilescu endeavored to show the need for protectionist measures to promote the development of peripheral countries. His defense of protectionism is usually presented as clumsy and founded on an incorrect method, even if he is often recognized as the forerunner of the theory of unequal exchange and the dependency theory. Few scholars note the similarity of Manoilescu’s theory with Karl Marx’s labor theory. This paper contributes to validating Manoilescu’s conclusions, the soundness of which we test here by reconstructing the theory from a Marxian perspective. A reconstruction of this type offers new possibilities of evaluating his theory and a better understanding of its contributions and limitations.     

Military Expenditures and Industrialization in Africa

My purpose here is to strengthen Karl Polanyi’s work through critique of and extension to abductive processes. Polanyi presented history woven into a new paradigm for analysis of socioeconomic systems, demonstrated discovery similar to abductive processes, and extended abduction into a holistic context. One of Polanyi’s most important contributions to socioeconomic analysis is the explanation of three integrated network models of socioeconomic reciprocity. They are coadjuvancy, redistribution, and market exchange. Polanyi extended abductive reasoning in two ways. First, he extended it beyond the cognitive logic of a person to inferences and societal belief changes of institutions. Second, he showed that, in the real world, beliefs are not only fixed like an abductive process, they are fixed in law. Throughout Polanyi’s historical presentation, market beliefs are being revised, thus serving as a demonstration of the abductive process. I make both positive and negative critique of a number of Polanyi’s concepts, with special attention to reciprocity, the double movement, and freedom. This critique and abduction extension strengthens Polanyi’s paradigm for future socioeconomic analysis with his integrative network models.     

Did the 2016 election cause changes in substance use? An intersectional approach

This paper examines the impact of the 2016 election on substance use. One of Donald Trump's major campaign initiatives was to build a wall at the American/Mexican border, and he frequently made negative comments about various underrepresented groups. I hypothesize that this unorthodox rhetoric, coupled with Donald Trump's proposed policies during his campaign, created an exogenous shock of discrimination for women, and ethnic and racial minority groups when he was elected. The Behavioral Risk Factor Surveillance System dataset, which has a variety of health measures and demographic information compiled at the individual level, is utilized to empirically examine the hypothesis. I examine the average treatment effects of the election using a difference-in-differences estimation strategy. The results indicate that there has been an increase in cigarette use for Hispanic individuals. These results highlight the impact that discriminatory rhetoric by political leaders and public figures has on marginalized groups within society. Policy implications include new ways to target substance use by targeting discrimination.     

The Economic Problem of Happiness: Keynes on Happiness and Economics

By stressing the substantial continuity of vision between John Maynard Keynes’s early unpublished essays and his more mature writings, the paper discusses Keynes’s ethics and focuses on his thoughts about happiness. In particular, we emphasize the anti-utilitarianism of Keynes’s vision and his belief that material wealth is but a precondition to enjoy the possibilities of a good life, and direct attention to problems of incommensurability raised by the multidimensional nature of happiness as considered by Keynes. We then argue that the rediscovery of Keynes’s legacy in this respect may be a precious counterweight to the most controversial aspects of today’s happiness research.     

Indirect higher order beliefs and cooperation

This study experimentally examines the role of indirect higher order beliefs in sequential psychological games. We consider a three-player sequential game in which the first and third players do not interact sequentially, but only through an intermediary, the second player. We posit that the third player’s decision to cooperate depends on his indirect higher order belief, namely, his belief about what the first player believes the second player would choose. We employ pre-play communication between the first and third players as a way to influence the third player’s indirect higher order belief. The evidence demonstrates that communication can effectively induce cooperation from the third player by shaping his indirect higher order belief.     

What is extreme about Mises’s extreme apriorism?

There is something extreme about Ludwig von Mises’s methodological apriorism, namely, his epistemological justification of the a priori element(s) of economic theory. His critics have long recognized and attacked the extremeness of Mises’s epistemology of a priori knowledge. However, several of his defenders have neglected what is (and what has long been recognized by his critics to be) extreme about Mises’s apriorism. Thus, the argument is directed less against Mises than against those contributions to the secondary literature that assert his methodological moderation while overlooking what the most prominent critics have found extreme about Mises’s apriorism. Defending Mises as a merely moderate apriorist because he held only a narrow part of the foundation of economics to be a priori is a straw-man defense against criticisms of his apriorism as epistemologically extreme.     

Campaign Advertising and Voter Welfare

This paper investigates the role of campaign advertising and the opportunity of legal restrictions on it. An electoral race is modelled as a signalling game with three classes of players: many voters, two candidates, and one interest group. The group has non–verifiable insider information on the candidates' quality and, on the basis of this information, offers a contribution to each candidate in exchange for a favourable policy position. Candidates spend the contributions they receive on non–directly informative advertising. This paper shows that: (1) a separating equilibrium exists in which the group contributes to a candidate only if the insider information about that candidate is positive; (2) although voters are fully rational, a ban on campaign advertising can be welfare–improving; and (3) split contributions may arise in equilibrium (and, if they arise too often, they are detrimental to voters).     

Entry and espionage with noisy signals

We analyze the effect of industrial espionage on entry deterrence. We consider a monopoly incumbent who may expand capacity to deter entry, and a potential entrant who owns an Intelligence System. The Intelligence System (IS) generates a noisy signal based on the incumbentʼs actions. The potential entrant uses this signal to decide whether or not to enter the market. The incumbent may signal-jam to manipulate the likelihood of the noisy signals and hence affect the entrantʼs decisions. If the precision of the IS is commonly known, the incumbent benefits from his rivalʼs espionage. Actually, he benefits more the higher is the precision of the IS while the spying entrant is worse off with an IS of relatively high quality. When the IS quality is private information of the entrant, the incumbent is better off with an IS of high expected precision while the entrant benefits from one of high quality. In this case espionage makes the market more competitive.     

The determinants of the vote for Trump: an analysis of Texas 2016 primary results

This article analyses the 2016 primary vote for Donald Trump in Texas. Much of Trump’s campaign rhetoric has been anti-immigrant. A major Trump campaign theme was his proposal to build a wall along the Mexico-U.S. border and make Mexico pay for it (Trump 2016). The econometric model estimated below uses county-level data for Texas. The dependent variable is the percent of the 2016 republican primary vote for Mr Trump. The model examines the electoral effects of Trump’s anti-immigrant rhetoric in a heavily Hispanic border state.     

Private value perturbations and informational advantage in common value auctions

We analyze the value of being better informed than one's rival in a two bidder, second price common value auction. Standard models of these auctions do not pin down relative bidding postures, but we show that by adding small amounts of private value information, a unique equilibrium can be restored. Additional common value information affects a bidder's payoff both directly, by increasing his information rent, and indirectly, by shifting the relative bidding posture of his opponent. Although the latter effect need not be positive, we establish broad conditions under which bidders with more information do better than their rivals. We turn to information acquisition and release and show that the desire to influence relative bidding postures can lead sellers to create new information rents (by releasing information privately to only one bidder) and bidders to forego information rents (instead choosing to gather information that a rival already has).     

Knowledge disclosure as intellectual property rights protection

We consider the problem of an inventor who discloses knowledge under the threat of a rival who may patent a competing idea. Disclosure diminishes the probability that the rival has of receiving a patent (legal externality) but it also decreases the rival’s marginal R&D cost (knowledge externality). Our results reveal that: (i) when the knowledge externality is ‘large’ (‘small’) relative to the legal one, an increase (decrease) in the patentability standard leads to higher disclosure and promotes R&D and (ii) if subsequent research creates positive external effects, the patentability standard should be set to promote further disclosure and R&D in equilibrium. The impact on the equilibrium configuration of changes in market profits is also examined.     

垂直关系中产品信誉效应的博弈分析

当一家厂商的行为或活动对产品信誉造成正面或负面影响后,其他相关厂商也要同时承受正面或负面的后果。在垂直关系中,下游零售商提供劣质服务产生了有损于信誉的负面效应,会对制造商和其他零售商造成更大的损害。而一家零售商提供优质服务增进产品信誉时,他只能在承受全部成本的情况下获得较少的利益。本文的理论模型说明,市场竞争的结果可能会形成零售商只愿意提供劣质服务的态势。通过采取排他性经营区域、排他性交易和拒绝供应等机制安排能够有效地化解损害信誉的行为,既能够保护整个垂直关系相关的厂商,同时也能使消费者得到更多的服务,促进经济活动的效率。     

Decisiveness of contributors’ perceptions in elections

We consider a model of two-candidate elections with a one-dimensional policy space. Spending on campaign advertisements can directly influence voters’ preferences, and contributors give the money for campaign spending in exchange for promised services if the candidate wins. We find that the winner of the election depends crucially on the contributors’ beliefs about who is likely to win and the contribution market tends toward nonsymmetric equilibria in which one of the two candidates has no chance of winning. If the voters are only weakly influenced by advertising or if permissible campaign spending is small, then the candidates choose policies close to the median voter’s ideal point, but the contributors still determine the winner. Uncertainty about the Condorcet winning point (or its nonexistence) can change these results and generate equilibria in which both candidates have substantial probabilities of winning.     

Individual utility in a context of asymmetric sensitivity to pleasure and pain: an interpretation of Bentham's felicific calculus

This paper aims at exploring, in a formal way, Bentham's statement that ‘the pleasure of gaining is not equal to the evil of losing’, which belongs to those aspects of the principle of utility left aside by Jevons‘ reconstruction. Consequently, the agent’s preference order will be viewed as depending on his initial situation, and on asymmetric sensitivity to gains and losses, relative to this situation. This leads 1) to discuss the coexistence of multiple preference orders, illustrated by Bentham's analysis of the optimal labour contract; and 2) to introduce true deliberation as a consequence of the gap between positive choice and rival assessments of utility.     

The legacy and promise of Vannevar Bush: rethinking the model of innovation and the role of public policy

The linear model of innovation argues that innovation takes place in a unidirectional sequence, with basic research directly diffusing in marketable product or process innovations. This perspective has served society well in past decades. However, recent productivity slowdowns in developed economies and the failure of innovation policies to continue to deliver desired results have called this perspective into question. Scholars explain these slowdowns by the oversimplification of the linear model which fails to consider the complexities associated with innovation processes. Although it is generally believed that Vannevar Bush’s report Science – The Endless Frontier – was based on his belief in a linear model of innovation and the notion that basic research is the ultimate source of all innovation, an examination of Bush’s writings and his life reveals that he believed in a more sophisticated model in which basic and applied research cross-fertilize each other and in which government’s job is not so much to stimulate basic research as it is to facilitate interactions between basic and applied research for the benefit of both and the prosperity of society. This paper explicates Bush’s model of the research and innovation process, explores the implications of that model, and derives policy recommendations.     

Partially Binding Platforms: Campaign Promises vis‐à‐vis Cost of Betrayal

This study examines and models the effects of partially binding campaign platforms in a political competition. Here, a candidate who implements a policy that differs from the platform must pay a cost of betrayal, which increases with the size of the discrepancy. I also analyse endogenous decisions by citizens to run for an election. In particular, the model is able to show two implications that previous frameworks have had difficulty with. First, candidates with different characteristics have different probabilities of winning an election. Second, even knowing that he/she will lose an election, a candidate will still run, hoping to make an opponent's policy approach his/her own policy.     

Impact of electoral competition,swing voters and interest groups on equilibrium policy platforms: Exploring the strategic forces at work

This paper constructs a stylized model of election between two opportunistic candidates who can influence equilibrium policy platforms in exchange for monetary contributions provided by two distinct lobby groups. Two key features are embedded which give rise to a dual uncertainty in the model: the existence of partisan spread across voter groups as well as the embezzlement of campaign funds received by the electoral candidates from the interest groups. We derive and compare the equilibrium platforms of the two office-seeking candidates in three scenarios: none of the above uncertainties exist (benchmark case), only uncertainty about voters’ preferences exist (swing-voter case), and both the uncertainties exist (swing voters and lobby groups case). We find that an opportunistic candidate’s swing-voter tax platform is always lower than the benchmark tax platform. Additionally, the equilibrium tax choice of electoral contenders in the swing voters and opposing lobby groups case is found to be greater than the tax level chosen under the swing-voter case if the lobby group advocating a greater level of tax is sufficiently well-organized such that it outweighs the relative swing-voter effect in that group. Furthermore, we find that when an electoral candidate transitions from being highly corrupt to becoming relatively more honest, the equilibrium level of public good provision adjusts in conformity with the well-organized group’s economic preferences. Finally, if the strength of relative lobbying effect is weaker, a lower partisan bias within that group induces an electoral candidate to choose a tax platform closer to that group’s policy bliss point.