Do converters facilitate the transition to a new incompatible technology? A dynamic analysis of converters

This paper analyzes the process of transition in standards between incompatible technologies when converters are available. Contrary to a common presumption that converters facilitate the transition from an old technology to an otherwise incompatible new technology, I find circumstances in which the possibility of transition is blockaded by the existence of converters. In the welfare analysis of converters, a distinction is made between ex ante and ex post efficiency effects. Finally, I also analyze the equilibrium behavior in the provision of converters and compare it to the socially optimal outcome.     

Patent pools,litigation, and innovation

This article analyzes patent pools and their effects on litigation incentives, overall royalty rates, and social welfare when patent rights are probabilistic and can be invalidated in court. With probabilistic patents, the license fees reflect the strength of the patents. We show that patent pools of complementary patents can be used to discourage infringement by depriving potential licensees of the ability to selectively challenge patents and making them committed to a proposition of all‐or‐nothing in patent litigation. If patents are sufficiently weak, patent pools with complementary patents reduce social welfare as they charge higher licensing fees and chill subsequent innovation incentives.     

Dynamic R&D Competition, Research Line Diversity, and Intellectual Property Rights

This paper develops a simple model of sequential innovations with a diversity of research lines. Competitive strategies of firms for R&D are analyzed at each stage in a sequence of innovations. We compare two alternative regimes of enforcing patent law, as a mechanism to provide adequate incentives for R&D at each stage. The regime that protects the research line gives monopoly rights to an entire line of research, hence limiting the utilization of the previous knowledge and retarding subsequent innovations. The other regime protects the product, which facilitates the use of previous knowledge at the expense of providing inadequate protection to the ideas embodied in the product, and results in underinvestment in the first stage.     

Economic modeling to evaluate the impact of chronic myeloid leukemia therapy management on the oncology care model in the US

Abstract

Objective: To develop an economic model to evaluate changes in healthcare costs driven by restricting usage of branded tyrosine kinase inhibitors (TKIs) through substitution with generic imatinib among chronic myeloid leukemia (CML) patients in a typical Oncology Care Model (OCM) practice, and examine the impact on Performance-Based Payment (PBP) eligibility.

Methods: An Excel-based economic model of an OCM practice with 1,000 cancer patients during a 6-month episode of care was developed. Cancer types and proportions of patients treated in the practice were estimated from an OCM report. All-cause healthcare costs were obtained from published literature. It was assumed that if a practice restricts usage of branded TKIs for newly-diagnosed CML patients, 80% of the market share of branded imatinib and 50% of the market shares of 2^nd-gen TKIs would shift to generic imatinib. Among established TKI-treated patients, it was assumed that 80% of the market share of branded imatinib and no patients treated with 2^nd-gen TKIs would shift to the generic.

Results: Four CML patients were estimated for a 1,000-cancer patient OCM practice with a total baseline healthcare cost of $51,345,812 during a 6-month episode. If the practice restricts usage of branded TKIs, the shift from 2^nd-gen TKIs to generic imatinib would reduce costs by $12,970, while shifting from branded to generic imatinib lowers costs by $25,250 during a 6-month episode. Minimum reductions of $3,013,832 in a one-sided risk model and $2,372,010 in a two-sided risk model are required for PBP eligibility; the shift from 2^nd-gen TKIs to generic imatinib would account for 0.4% and 0.5% of the savings required for a PBP, respectively.

Conclusions: This analysis indicates that the potential cost reduction associated with restricting branded TKI usage among CML patients in an OCM setting will represent only a small proportion of the cost reduction needed for PBP eligibility.     

A solution to the random assignment problem on the full preference domain

We consider the problem of allocating a set of indivisible objects to agents in a fair and efficient manner. In a recent paper, Bogomolnaia and Moulin consider the case in which all agents have strict preferences, and propose the probabilistic serial (PS) mechanism; they define a new notion of efficiency, called ordinal efficiency, and prove that the probabilistic serial mechanism finds an envy-free ordinally efficient assignment. However, the restrictive assumption of strict preferences is critical to their algorithm. Our main contribution is an analogous algorithm for the full preference domain in which agents are allowed to be indifferent between objects. Our algorithm is based on a reinterpretation of the PS mechanism as an iterative algorithm to compute a “flow” in an associated network. In addition we show that on the full preference domain it is impossible for even a weak strategyproof mechanism to find a random assignment that is both ordinally efficient and envy-free.     

Adverse Selection and Pay Compression

A fundamental result of the principal-agent literature is that pay will be linked to performance when it is difficult for the principal to monitor the agent's actions. However, performance pay can lead to adverse incentives. In these models, high-powered incentives encourage workers to neglect some aspects of their job or to sabotage their coworkers' efforts. This paper offers another explanation for the weak link between pay and performance: worker heterogeneity. When workers are heterogeneous and labor contracts are contests, the Nash equilibrium often pools workers. I show that this implies that the link between pay and performance is weaker than would be the case if firms could observe workers' types before contracting and offer each type their respective optimal contests.     

Toward a direct contribution-reinforcement pay system

To make a pay system a source of reinforcement for contribution and give people an opportunity to participate in a reward program each year without the stigma of becoming “too expensive,” firms might consider making less than 100% of the total amount increase distributed to an individual a permanent part of his base salary. A part of the raise could be in effect for, say, a year.     

The impact of the Interaction between institutional quality and aid volatility on growth: theory and evidence

We analyze both theoretically and empirically, the effect of aid volatility and its interaction effect with institutional quality on per capita economic growth. Our theoretical model, in which an aid-recipient government, operating in an institutional environment of some given quality (making choices over the distribution of aid), predicts that a negative effect of aid volatility on growth is mitigated by stronger institutional quality. We use panel data covering the period 1984–2004 for 78 countries to test this theoretical prediction. Using Generalised Methods of Moments (GMM) we find the relationship between growth and aid volatility is significantly negative and depends on institutional quality. Our baseline results are robust to various computations of aid volatility and foreign aid, time periods, sub-samples and additional covariates.     

Willingness to Pay and the Cost of Commitment: An Empirical Specification and Test

In a static setting, willingness to pay for an environmental improvement is equal to compensating variation. In a dynamic setting, however, willingness to pay may also contain a commitment cost. In this paper we incorporate the dynamic nature of the value formation process into a stated preference study designed to test whether there is an important dynamic component (commitment cost) in stated preference values. The results clearly indicate that stated preference values can contain commitment costs and that these can be quite large: respondents offered the opportunity to delay their purchasing decisions until more information became available were willing to pay significantly less for improved water quality than those facing a now-or-never decision. These results have important consequences for the design and interpretation of stated preference data.     

再见,祝你好运,下周见

这是公司发展史上策划最周详的过渡之一.两年前,微软公司董事长比尔·盖茨宣布,他将放手在这家他与别人共同创建的公司的日常管理责任,把更多的时间投入慈善事业.从那以后,盖茨和微软公司首席执行官史蒂芬·巴尔默提拔了那些将会接替盖茨,为微软公司开发技术、战略和远景的人.