Quality Certification by Geographical Indications, Trademarks and Firm Reputation

We study firm reputation as a mechanism to assure product quality in perfectly competitive markets in a context in which both certification and trademarks are available. Shapiro’s (1983) model of reputation is extended to reflect both collective and firm-specific reputations, and this framework is used to study certification and trademarks for food products with a regional identity, known as geographical indications (GIs). Our model yields two primary results. First, in markets with asymmetric information and moral hazard problems, credible certification schemes reduce the cost of establishing reputation and lead to welfare gains compared to a situation in which only private trademarks are available. Hence, certification improves the ability of reputation to operate as a mechanism for assuring quality. Second, the actual design of the certification scheme plays an important role in mitigating informational problems. From a policy perspective, our results have implications for the current debate and negotiations on GIs at the World Trade Organization and the ongoing product quality policy reform within the European Union. With regard to the instrument of choice to provide intellectual property protection for GIs, our model favors a sui generis scheme based on appellations over certification marks. Finally, our model supports the validity of the traditional specialities guaranteed scheme of the European Union as an instrument for the provision of high-quality products that are not linked to a geographic area.Asymmetric Information, Certification, Geographical Indications, Quality, Reputation, Environmental Economics and Policy, D23, D82, L14, L15, Q1,

Credibility of optimal monetary delegation: do we really need prohibitive reappointment costs?

The paper examines the current debate on the real effectiveness of delegation in overcoming the problem of time inconsistency that afflicts discretionary monetary policy. An important contribution by Jensen has shown that, when the government is unable to credibly carry out optimal policy and delegates monetary policy to a central banker with an announced incentive scheme, optimal policy can be credible only if reappointment costs are prohibitive. This finding is questioned in the present analysis. In particular we show that, when delegation is not considered as an alternative, but rather as supplementary, to reputation and is conducive to reputation building for the central banker, the circumstances under which optimal delegation can be credible need not be so extreme. This different result is based on the constraint that the central banker's reputation for low inflation imposes on the government's temptation to deviate from its announcements and on the role played by incentive schemes in strengthening the central banker's reputation. Keywords; delegation, reappointment, in‡ationary bias

Security and Privacy Issues in Wireless Mesh Networks: A Survey

This book chapter identifies various security threats in wireless mesh network (WMN). Keeping in mind the critical requirement of security and user privacy in WMNs, this chapter provides a comprehensive overview of various possible attacks on different layers of the communication protocol stack for WMNs and their corresponding defense mechanisms. First, it identifies the security vulnerabilities in the physical, link, network, transport, application layers. Furthermore, various possible attacks on the key management protocols, user authentication and access control protocols, and user privacy preservation protocols are presented. After enumerating various possible attacks, the chapter provides a detailed discussion on various existing security mechanisms and protocols to defend against and wherever possible prevent the possible attacks. Comparative analyses are also presented on the security schemes with regards to the cryptographic schemes used, key management strategies deployed, use of any trusted third party, computation and communication overhead involved etc. The chapter then presents a brief discussion on various trust management approaches for WMNs since trust and reputation-based schemes are increasingly becoming popular for enforcing security in wireless networks. A number of open problems in security and privacy issues for WMNs are subsequently discussed before the chapter is finally concluded.Comment: 62 pages, 12 figures, 6 tables. This chapter is an extension of the author's previous submission in arXiv submission: arXiv:1102.1226. There are some text overlaps with the previous submissio

Towards Secure Blockchain-enabled Internet of Vehicles: Optimizing Consensus Management Using Reputation and Contract Theory

In Internet of Vehicles (IoV), data sharing among vehicles is essential to improve driving safety and enhance vehicular services. To ensure data sharing security and traceability, highefficiency Delegated Proof-of-Stake consensus scheme as a hard security solution is utilized to establish blockchain-enabled IoV (BIoV). However, as miners are selected from miner candidates by stake-based voting, it is difficult to defend against voting collusion between the candidates and compromised high-stake vehicles, which introduces serious security challenges to the BIoV. To address such challenges, we propose a soft security enhancement solution including two stages: (i) miner selection and (ii) block verification. In the first stage, a reputation-based voting scheme for the blockchain is proposed to ensure secure miner selection. This scheme evaluates candidates' reputation by using both historical interactions and recommended opinions from other vehicles. The candidates with high reputation are selected to be active miners and standby miners. In the second stage, to prevent internal collusion among the active miners, a newly generated block is further verified and audited by the standby miners. To incentivize the standby miners to participate in block verification, we formulate interactions between the active miners and the standby miners by using contract theory, which takes block verification security and delay into consideration. Numerical results based on a real-world dataset indicate that our schemes are secure and efficient for data sharing in BIoV.Comment: 12 pages, submitted for possible journal publicatio

On Non-Parallelizable Deterministic Client Puzzle Scheme with Batch Verification Modes

A (computational) client puzzle scheme enables a client to prove to a server that a certain amount of computing resources (CPU cycles and/or Memory look-ups) has been dedicated to solve a puzzle. Researchers have identified a number of potential applications, such as constructing timed cryptography, fighting junk emails, and protecting critical infrastructure from DoS attacks. In this paper, we first revisit this concept and formally define two properties, namely deterministic computation and parallel computation resistance. Our analysis show that both properties are crucial for the effectiveness of client puzzle schemes in most application scenarios. We prove that the RSW client puzzle scheme, which is based on the repeated squaring technique, achieves both properties. Secondly, we introduce two batch verification modes for the RSW client puzzle scheme in order to improve the verification efficiency of the server, and investigate three methods for handling errors in batch verifications. Lastly, we show that client puzzle schemes can be integrated with reputation systems to further improve the effectiveness in practice

Contractual relations between European VC-funds and investors: the impact of reputation and bargaining power on contractual design

The paper explores factors that influence the design of financing contracts between venture capital investors and European venture capital funds. 122 Private Placement Memoranda and 46 Partnership Agreements are investigated in respect to the use of covenant restrictions and compensation schemes. The analysis focuses on the impact of two key factors: the reputation of VC-funds and changes in the overall demand for venture capital services. We find that established funds are more severely restricted by contractual covenants. This contradicts the conventional wisdom which assumes that established market participants care more about their reputation, have less incentive to behave opportunistically and therefore need less covenant restrictions. We also find that managers of established funds are more often obliged to invest own capital alongside with investors money. We interpret this as evidence that established funds have actually less reason to care about their reputation as compared to young funds. One reason for this surprising result could be that managers of established VC funds are older and closer to retirement and therefore put less weight on the effects of their actions on future business opportunities. We also explore the effects of venture capital supply on contract design. Gompers and Lerner (1996) show that VC-funds in the US are able to reduce the number of restrictive covenants in years with high supply of venture capital and interpret this as a result of increased bargaining power by VC-funds. We do not find similar evidence for Europe. Instead, we find that VC-funds receive less base compensation and higher performance related compensation in years with strong capital inflows into the VC industry. This may be interpreted as a signal of overconfidence: Strong investor demand seems to coincide with overoptimistic expectations by fund managers which make them willing to accept higher powered incentive schemes

Reputation-based security protocol for MANETs in highly mobile disconnection-prone environments

This paper is concerned with fully distributed reputation-based mechanisms that improve security in MANETS. We introduce a number of optimisations to the current reputation schemes used in MANETs such as selective deviation tests and adaptive expiration timer that aim to deal with congestion and quick reputation convergence. We propose to use two different centrality measures for evaluation of the individual trust claims and resolving the aggregated ones. We design and build our prototype over AODV and test it in NS-2 in the presence of variable active blackhole attacks in highly mobile and sparse networks. Our results show that we achieve increased throughput while delay and jitter decrease and converge to AODV