The design of vertical R&D collaborations

Suppliers play a major role in innovation processes. We analyze ownership allocations and the choice of R&D technology in vertical R&D cooperations. Given incomplete contracts on the R&D outcome, there is a tradeoff between R&D specifically designed towards a manufacturer (increasing investment productivity) and a general technology (hold-up reduction). We find that the market solution yields the specific technology in too few cases. More intense product market competition shifts optimal ownership towards the supplier. The use of exit clauses increases the gains from the collaboration. JEL Classification: L22, L24, O31, O3

State of New York Public Employment Relations Board Decisions from September 25, 1996

9_25_1996_PERB_BD_DecisionsOCR.pdf: 129 downloads, before Oct. 1, 2020

Joint Multi-Cell Resource Allocation Using Pure Binary-Integer Programming for LTE Uplink

Due to high system capacity requirement, 3GPP Long Term Evolution (LTE) is likely to adopt frequency reuse factor 1 at the cost of suffering severe inter-cell interference (ICI). One of combating ICI strategies is network cooperation of resource allocation (RA). For LTE uplink RA, requiring all the subcarriers to be allocated adjacently complicates the RA problem greatly. This paper investigates the joint multi-cell RA problem for LTE uplink. We model the uplink RA and ICI mitigation problem using pure binary-integer programming (BIP), with integrative consideration of all users' channel state information (CSI). The advantage of the pure BIP model is that it can be solved by branch-and-bound search (BBS) algorithm or other BIP solving algorithms, rather than resorting to exhaustive search. The system-level simulation results show that it yields 14.83% and 22.13% gains over single-cell optimal RA in average spectrum efficiency and 5th percentile of user throughput, respectively.Comment: Accepted to IEEE Vehicular Technology Conference (VTC Spring), Seoul, Korea, May, 201

Pharmaceutical Patent Litigation Settlements: Implications for Competition and Innovation

Although brand-name pharmaceutical companies routinely procure patents on their innovative medications, such rights are not self-enforcing. Brand-name firms that wish to enforce their patents against generic competitors must commence litigation in the federal courts. Such litigation ordinarily terminates in either a judgment of infringement, which typically blocks generic competition until such time as the patent expires, or a judgment that the patent is invalid or not infringed, which typically opens the market to generic entry. As with other sorts of commercial litigation, however, the parties to pharmaceutical patent litigation may choose to settle their case. Certain of these settlements have called for the generic firm to neither challenge the brand-name company’s patents nor sell a generic version of the patented drug for a period of time. In exchange, the brand-name drug company agrees to compensate the generic firm, often with substantial monetary payments over a number of years. Because the payment flows counterintuitively, from the patent proprietor to the accused infringer, this compensation has been termed a “reverse” payment. Commentators have differed markedly in their views of reverse payment settlements. Some observers believe that they are a consequence of the specialized patent litigation procedures established by the Hatch-Waxman Act. Others have concluded that when one competitor pays another not to market its product, such a settlement is anti-competitive and a violation of the antitrust laws. Since 2003, Congress has required that litigants notify federal antitrust authorities of their pharmaceutical patent settlements. That legislation did not dictate substantive standards for assessing the validity of these agreements under the antitrust law, however. That determination was left to judicial application of general antitrust principles. Facing different factual patterns, some courts have concluded that a particular reverse payment settlement constituted an antitrust violation, while others have upheld the agreement. Congress possesses a number of alternatives for addressing reverse payment settlements. One possibility is to await further judicial developments. Another option is to regulate the settlement of pharmaceutical patent litigation in some manner. In the 111th Congress, S. 369, the Preserve Access to Affordable Generics Act, would establish a presumption that certain reverse payment settlements are unlawful. S. 369 then establishes relevant factors to be weighed in deciding whether that presumption has been overcome through a showing that the procompetitive benefits of the settlement outweigh its anticompetitive effects. This report will be updated as needed

Commons - Whose Commons? Considering conceptual approaches to rural space of production

The article takes its point of departure in current suggestions stating that the idea of ‘commons’ could be a universal and normative guideline for how to organise a part of the interplay between nature and human activity. It is stated, that the concept in contemporary discourses has a widespread spectrum of connotations and is engaged for descriptive, prescriptive, and normative purposes. The content, character and meaning thus depend on context and dimensions in focus; the point is illustrated by means of the historical Danish commons. In a consecutive investigation of implicated concepts from social sciences (‘property rights’ being the starting point) it is similarly stated that implications cannot be determined ex ante. By means of elements from institutional economics and the sociology of space, suggestions for a conceptual framework are presented as basis for more detailed studies at a lower level of abstraction. Returned to Danish farming – but now in its contemporary settings – it is concluded that the framework of commons not adequately can be copied-and-pasted into present context due to the complex interconnectivity where local agriculture have boundless prerequisites and effects

Manufacturing Barriers to Biologics Competition and Innovation

As finding breakthrough small-molecule drugs gets harder, drug companies are increasingly turning to “large molecule” biologics. Although biologics represent many of the most promising new therapies for previously intractable diseases, they are extremely expensive. Moreover, the pathway for generic-type competition set up by Congress in 2010 is unlikely to yield significant cost savings. In this Article, we provide a fresh diagnosis of, and prescription for, this major public policy problem. We argue that the key cause is pervasive trade secrecy in the complex area of biologics manufacturing. Under the current regime, this trade secrecy, combined with certain features of FDA regulation, not only creates high barriers to entry of indefinite duration but also undermines efforts to advance fundamental knowledge. In sharp contrast, offering incentives for information disclosure to originator manufacturers would leverage the existing interaction of trade secrecy and the regulatory state in a positive direction. Although trade secrecy, particularly in complex areas like biologics manufacturing, often involves tacit knowledge that is difficult to codify and thus transfer, in this case regulatory requirements that originator manufacturers submit manufacturing details have already codified the relevant tacit knowledge. Incentivizing disclosure of these regulatory submissions would not only spur competition but it would provide a rich source of information upon which additional research, including fundamental research into the science of manufacturing, could build. In addition to provide fresh diagnosis and prescription in the specific area of biologics, the Article contributes to more general scholarship on trade secrecy and tacit knowledge. Prior scholarship has neglected the extent to which regulation can turn tacit knowledge not only into codified knowledge but into precisely the type of codified knowledge that is most likely to be useful and accurate. The Article also draws a link to the literature on adaptive regulation, arguing that greater regulatory flexibility is necessary and that more fundamental knowledge should spur flexibility. A vastly shortened version of the central argument that manufacturing trade secrecy hampers biosimilar development was published at 348 Science 188 (2015), available online

Vertical integration and exclusive vertical restraints in health-care markets

We examine vertical integration and exclusive vertical restraints in health-care markets where insurers and hospitals bilaterally bargain over contracts. We employ a bargaining model in a concentrated health-care market of two hospitals and two health insurers competing on premiums. Without vertical integration, some bilateral contracts will not be concluded only if hospitals are sufficiently differentiated, whereas with vertical integration we find that a breakdown of a contract will always occur. There may be two reasons for not concluding a contract. First, hospitals maychoose to soften competition by contracting only one insurer in the market. Second, insurers and hospitals may choose to increase product differentiation by contracting asymmetric hospital networks. Both types raise total industry profits and lower consumer welfare.

Moral Pluralism and Conflict

Institutions have often been characterized as responses to conflict, and assumptions about the nature of conflict have frequently determined the structure and scope of political activity. Two prevalent interpretations of conflict portray it as either a conflict of interest or a competition for resources. Yet there is another view of conflict that regards it in terms of a contest of values, something that raises a different set of questions and issues. These issues involve concerns about the incommensurability and incompatibility of values, and challenge contemporary arguments that rely upon the ordering of preferences or that urge the pursuit of a normative consensus. As I argue, both preference based theories and theories of deliberative democracy prove to deal inadequately with the challenges of moral pluralism and value conflict