Multistage R&D competition and patent policy

In this paper a model of multistage R&D patent policy is investigated. We study the impact of the duration of patent protection for intermediate products on R&D races when the discovery of the final product requires the accomplishment of an intermediate step. Using a multistage model where firms choose their levels of research investment at each stage, we find all subgame-perfect equilibria of the game. We also determine how competition affects a firm's level of research investment at different stages of the R&D competition.     

Environmental innovation policy and international competition

We consider one polluting industry in an open economy. The national government implements a policy of industrial pollution control, by inducing appropriate technological innovation to reduce toxic emissions. The emission-reducing innovations are developed through firm-specific costly investments. Under different hypotheses on market structure (perfect competition, Bertrand and Cournot oligopoly), international competition forces the national government to subsidize innovation. The appropriate subsidy scheme varies according to the information available to the government and according to market structure. If information is asymmetric, the subsidy must include the information premium necessary to separate different types of firms.     

Patent policy, patent pools, and the accumulation of claims in sequential innovation

We present a dynamic model where the accumulation of patents generates an increasing number of claims on sequential innovation. We compare innovation activity under three regimes??patents, no-patents, and patent pools??and find that none of them can reach the first best. We find that the first best can be reached through a decentralized tax-subsidy mechanism, by which innovators receive a subsidy when they innovate, and are taxed with subsequent innovations. This finding implies that optimal transfers work in the exact opposite way as traditional patents. Finally, we consider patents of finite duration and determine the optimal patent length.     

Entrepreneurial innovations,competition and competition policy

We construct a model where an entrepreneur can innovate for entry or for sale. It is shown that increased product market competition tends to increase the relative profitability of innovation for sale. Increased competition not only reduces the profits of entrants and the acquirer of the inventions in a similar fashion, but also reduces the profit of non-acquirers. Therefore, incumbents' valuations of innovations are less negatively affected by increased competition, and the incentive for innovation for sale can increase with increased competition. Moreover, a stricter, but not too strict, merger policy is shown to increase the incentive for innovations for sale by ensuring the bidding competition for the innovation.     

Price competition and innovation in markets with brand loyalty

Intuition suggests that in markets with consumer lock-in (‘brand loyalty’), firms with a large customer base earn higher profits. We show for a homogeneous goods duopoly that the intuition can be misleading, as the intensity of price competition depends on the initial market split. We derive mixed-strategy equilibria, and show that competition is often most intense when the market is split evenly. As a result, firms coordinate on an asymmetric split when consumers are not yet attached to firms. We also allow for asymmetric costs, and analyze when firms with a larger customer base are more eager to innovate.     

EU regional policy and tax competition

The European Union (EU) provides coordination and financing of trans-European transport infrastructures, i.e. roads and railways, which link the EU member states and reduce the cost of transport and mobility. This raises the question of whether EU involvement in this area is justified by inefficiencies of national infrastructure policies. Moreover, an often expressed concern is that policies enhancing mobility may boost tax competition. We analyze these questions using a model where countries compete for the location of profitable firms. We show that a coordination of investment in transport cost reducing infrastructures within union countries enhances welfare and mitigates tax competition. In contrast, with regard to union-periphery infrastructure, the union has an interest in a coordinated reduction of investment expenditures. Here, the effects on tax competition are ambiguous. Our results provide a rationale for EU-level regional policy that supports the development of intra-union infrastructure.     

Complementarities in innovation policy

This paper develops a framework for testing discrete complementarities in innovation policy using European data on obstacles to innovation. We propose a discrete test of supermodularity in innovation policy leading to a number of inequality constraints. We apply our test to two types of innovation decisions: to innovate or not, and if so, by how much. We find that the evidence regarding the existence of complementarity in innovation policies depends on the phase of innovation that is targeted (getting firms innovative or increasing their innovation intensity) as well as on the particular pair of policies that is being considered. The two phases of the innovation process, i.e. the probability of becoming an innovator and the intensity of innovation, are subject to different constraints. Interestingly, there seems to be a need to adopt a package of policies to make firms innovate, while a more targeted choice among policies is necessary to make them more innovative.     

The purpose of competition policy

Conclusion We believe that the Commission attributes too great a significance, almost magical powers, to business rivalry as a force in economic life. There are no grounds for this either in the Treaty or in actual experience. While not wishing to deny that business rivalry may entail great benefits, we would insist that its drawbacks should not be ignored and that competition policy should turn mainly on market performance.In fact, the Commission is not pursuing a liberal competition policy but has adopted a case-by-case, noneconomic, legal approach that takes no account of performance.Monopoly is generally condemned. But monopoly, no more than oligopoly, which is usually coordinated, should not be condemnedper se. Monopoly may even result in better market performance than oligopoly.Competition policy must not therefore be considered an end in itself but must be seen in the light of general economic policy and, more specifically, of price policy. It must be regarded in fact as a component part of price policy.     

Challenges in EU competition policy

This paper puts forward some challenges facing European Competition Policy. It starts out with the premises that European Competition Policy has been one of the great achievements of European Integration. However, there are several areas of competition policy that remain to be challenging, especially in terms of their economic impact on consumers, markets, and firms. Specifically, the paper addresses four areas: (1) efficiencies in merger control properly, (2) market definition, (3) the role of distortions of competition in state aid control, and (4) the balance between competition policy and regulation.     

Strategic competition and optimal parallel import policy

Abstract In a two‐country Hotelling type duopoly model of price competition, we show that parallel import (PI) policy can act as an instrument of strategic trade policy. The home firm’s profit is higher when it cannot price discriminate internationally if and only if the foreign market is sufficiently bigger than the domestic one. The key mechanism in the model is that the home firm’s incentive to keep its domestic price close to the optimal monopoly price affects its behavior during price competition abroad. We also analyze the welfare implications of PI policies and show that our key insights extend to quantity competition.     

Specification choice and robustness in CGE trade policy analysis with imperfect competition

In order to contribute to a more comprehensive understanding of the robustness of the quantitative results of applied trade policy simulations to variations in the assumptions about firm conduct, this article provides a systematic synopsis of alternative formulations of imperfectly competitive supply behaviour in applied general equilibrium trade models and examines the sensitivity of simulated trade policy effects to the specification choice and calibration strategy within a prototype multi-country model. The analysis suggests in particular, that simulation results are generally far more sensitive to numerical specification choices at the calibration stage, than to the prior choice of firm conduct specification.     

Liberalisation, competition and innovation in the postal sector

This paper empirically assesses the effect of liberalisation and competition on innovation in the postal sector. The analysis is restricted to end-to-end competition. The effect on the incentives to innovate of letter volume, public ownership and other control variables is also tested. Data on liberalisation, competition and innovation in the postal sector is collected for seventeen European countries over eleven years. Three measures are used as proxies for innovation: (1) an innovation index based on a survey conducted for this purpose; (2) the accumulated number of innovations (based on the same survey); and (3) labour productivity. We also develop a liberalisation index to measure the percentage of market liberalised (in terms of letter volume). Several models are estimated by GLS. In general, the models estimated have a high explanatory power. We find evidence that market liberalisation has a positive effect on innovation and that an increase in the market share of the competitors stimulates the investment in innovation, at least until the market share of the competitors reaches a certain threshold. Letter volume is also significant and has a positive impact on innovation. GDP per capita turns out to be significant and has a positive relationship with innovation in all the models estimated.     

The choice of innovation policy instruments

The purpose of this article is to discuss the different types of instruments of innovation policy, to examine how governments and public agencies in different countries and different times have used these instruments differently, to explore the political nature of instrument choice and design (and associated issues), and to elaborate a set of criteria for the selection and design of the instruments in relation to the formulation of innovation policy. The article argues that innovation policy instruments must be designed and combined into mixes in ways that address the problems of the innovation system. These mixes are often called “policy mix”. The problem-oriented nature of the design of instrument mixes is what makes innovation policy instruments ‘systemic’.     

Viewpoint: Canadian competition policy: progress and prospects

Abstract.  This paper discusses the state of competition policy – in particular the economics of competition policy – in Canada today and considers its prospects going forward. It argues that: (i) the importance of competition policy has become accepted widely in Canada and indeed throughout much of the world; (ii) competition policy design and enforcement is in general well done in Canada; (iii) economists, including many Canadians, have played a central role in the development of an efficient and effective competition policy in Canada and elsewhere; and (iv) competition policy in Canada is today facing very serious challenges, and economists should be concerned.     

Population,competition, innovation,and economic growth with and without human capital investment

This paper analyzes how population and product market competition (PMC) may interact with each other in affecting the pace of economic growth. The impact of a change in population (size or growth) and in the degree of PMC on productivity growth may vary depending on the presence of human versus physical capital investment, the way in which individuals may purposefully invest in human capital, the type of input used in the uncompetitive sector, the form of households’ intertemporal utility, and whether PMC (measured by the degree of substitutability between differentiated intermediates) is disentangled or not from the input shares in aggregate income. It is found that a growth model with human capital accumulation à la Lucas (J Monet Econ 22(1):3–42, 1988) and a continuum of degrees of intertemporal altruism can predict an ambiguous link between population and economic growth rates, in line with the available empirical evidence. The article also analyzes the conditions under which market structure (monopoly power) and population (size or growth) may be complementary to each other in the process of long-run economic growth.     

推进我国科技进步体制和机制创新

科技快速进步是时代的特征,当代科技进步的特点是：高技术快速发展、不断创新的技术、众多领域技术并进、以当代科学新发现为基础的技术创新。近300年来西方国家工业技术的迅速发展,在于形成了和依靠了市场经济中促进技术进步的一整套制度安排和经济机制,面对世界科技创新的大潮,需要加强体制构建,完善经济机制,实现我国科学技术快速进步。