BEYOND THE HYPE: INTELLECTUAL PROPERTY AND THE KNOWLEDGE SOCIETY/KNOWLEDGE ECONOMY

Abstract.  This paper explores the debates surrounding whether or not we have now moved into a new knowledge economy and/or knowledge society and if so whether this shift is as significant and as far reaching as the industrial revolution. In this possible transformation the place of information communications technologies has been crucial. Debate has occurred across both economics and sociology with differing emphases as is shown in the ranges of definitions that we review in the paper. One consistent factor is the lack of clarity and consistency between them both within and across the disciplines. In order to explore the issues that the debates raises in a more grounded way, the paper explores them in relation to intellectual property (IP) and the intellectual commons in the process of innovation, growth and economic development. The paper is developed through an analysis first of the industrial revolution and the role within this of uncertainty, technologies, complementarities and elective affinities and the way IP was protected and controlled through patents, secrecy, being first to the market and copyright. The second part of the paper examines definitions of the knowledge economy and society and the role within these of information communication technologies in order to explore whether the ways that IP is protected and controlled have changed. In the debate about the 'knowledge economy and society' the role of innovation via human capital with a greater reliance on intellectual capabilities has been emphasized. The role of IP thus remains central but is now challenged by the rise of new forms of communication, which make its protection harder and move much of the concern with respect to regulation to a global rather than national and local level.     

Designing a guideline-based utilization management program

Many public and private organizations are developing and publishing clinical guidelines to assist health care providers and patients in making appropriate medical decisions. Unless clinical guidelines are part of a well-designed managed care program, they have little effect on physician practice styles. This article explores integral components of an effective guideline-based utilization management program. Initial evaluation of this program suggests that, as part of a well-designed utilization management program, clinical guidelines can inform patients and physicians, and create appropriate incentives for effective health care delivery.     

Evaluating Projects and Assessing Sustainable Development in Imperfect Economies

We are interested in three related questions:(1) How should accounting prices be estimated?(2) How should we evaluate policy change in animperfect economy? (3) How can we check whetherintergenerational well-being will be sustainedalong a projected economic programme? We do notpresume that the economy is convex, nor do weassume that the government optimizes on behalfof its citizens. We show that the same set ofaccounting prices should be used both forpolicy evaluation and for assessing whether ornot intergenerational welfare along a giveneconomic path will be sustained. We also showthat a comprehensive measure of wealth,computed in terms of the accounting prices, canbe used as an index for problems (2) and (3)above. The remainder of the paper is concernedwith rules for estimating the accounting pricesof several specific environmental naturalresources, transacted in a few well knowneconomic institutions.     

Multi-Dimensional Procurement Auctions for Power Reserves: Robust Incentive-Compatible Scoring and Settlement Rules

System operators in the electricity industry purchase reserve capacity in a procurement auction in which suppliers offer two-part bids, one part for making capacity available and another part for supplying incremental energy when called. Key ingredients of an efficient auction design are the scoring rule for comparing bids, and the settlement rule for paying accepted bids. We use the principle of incentive compatibility to establish that very simple rules suffice. In particular, the scoring rule uses only the capacity part of the bid, and energy supplies are paid the spot price. This is the design adopted in California.     

Cost Structures and Nash Play in Repeated Cournot Games

This paper reports an experiment designed to assess the effects of a rotation in the marginal cost curve on convergence in a repeated Cournot triopoly. Increasing the cost curve's slope both reduces the serially-undominated set to the Nash prediction, and increases the peakedness of earnings. We observe higher rates of Nash equilibrium play in the design with the steeper marginal cost schedule, but only when participants are also rematched after each decision. Examination of response patterns suggests that the treatment with a steeper marginal cost curve and with a re-matching of participants across periods induces the selection of Nash Consistent responses.     

Discriminatory Price Auctions in Electricity Markets: Low Volatility at the Expense of High Price Levels

A pay-as-offered or discriminatory price auction (DPA) has been proposed to solve the problem of inflated and volatile wholesale electricity prices. Using the experimental method we compare the DPA with a uniform price auction (UPA), strictly controlling for unilateral market power. We find that a DPA indeed substantially reduces price volatility. However, in a no market power design, prices in a DPA converge to the high prices of a uniform price auction with structural market power. That is, the DPA in a no market power environment is as anti-competitive as a UPA with structurally introduced market power.     

Who Cites What?

The present paper analyses citations in the work of a large number of PhD students. We show that the pattern of citations of journal articles, books and other reference material differs substantially across areas within economics. An investigation of reciprocal citations reveals a surprisingly low degree of communication among the Group of Eight universities and a high propensity to cite authors from the same institution, especially supervisors. We also analyse the Australian share of cited works, and identify journals, articles and authors that PhD students value highly.     

A model of project evaluation with limited attention

Summary This paper characterizes the optimal policy for a model in which manager may adopt an endogenous number of projects but has only limited resources to devote to their evaluation and maintenance. In any period, the manager may discard any subset of existing projects but may evaluate only one existing or one new project which is then either discarded or restored. Both its current return and the probability with which a project may be restored depends only on the number of periods since its last evaluated. For a manager whose objective is to maximize the sum of discounted returns, the optimal policy takes one of two forms. A discard policy specifies that the manager evaluate a new project in each period and discard current projects at some critical age. An age inspection policy specifies that the manager evaluate a new project only if all current projects are sufficiently young.Support from the C. V. Starr Center for Applied Economics and the Research Resource Committee of the Rutgers Graduate School of Management is gratefully acknowledged. We thank Roy Radner for valuable assistance in the early stages of the work.     

Public Stackelberg Leadership in a Mixed Oligopoly with Foreign Firms

This is the first paper to consider a mixed oligopoly in which a public Stackelberg leader competes with both domestic and foreign private firms. The welfare maximising leader is shown to always produce less than under previous Cournot conjectures. Introducing leadership also alters previous public pricing rules resulting in prices that may be either greater than or less than marginal cost depending on the relative number of domestic firms. Furthermore, entry of a foreign firm will increase welfare only when the relative number of domestic firms is small, but that share is shown to be larger than has been indicated without leadership. Unlike previous models, the influence on public profit of a foreign acquisition is ambiguous and is related to the relative number of domestic firms. Finally, the consequences of privatisation are shown, for the first time, to depend on the relative number of domestic firms.     

Announced layoffs: Their effect on corporate financial performance

Conventional wisdom holds that when a firm gets into trouble due to lagging sales and rising costs, cutting the size of the organization to reduce fat and waste is a normal and effective response. In this study, evidence was found to suggest that just the opposite might be true. The financial performance of Fortune 100 companies was tracked over a five-year period—two years prior to the announced layoff, the year of the layoff announcement, and two years following it. Contrary to expectations, the results indicate that financial performance worsened, rather than improved, following announced layoffs. Strategic and human resource implications for the management of corporate downsizing are provided.