Efficient Compensation for Employees' Inventions: An Economic Analysis of a Legal Reform in Germany

The German law on employees' inventions requires employees to report to their employer any invention made in relation with the work contract. An employer claiming the right to the invention is obliged to pay a compensation to the employee. Up to now, this compensation is a matter of negotiations. A reform proposal seeks to introduce a combination of a fixed payment and a share of the project value. Regulations like this can also be found at U.S. universities. Up to now, German scholars enjoyed the privilege of not having to report their inventions to their universities. The new German law concerning inventions made by university scholars has abolished this privilege. Universities now have the right to claim the invention in exchange for a mandatory 30-percent share of the project value. Our model draws on Principal-Agent theory and combines elements of moral hazard and hold-up. We derive a unique efficient payment scheme that consists only of a lump-sum payment. We show that freedom to negotiate over the compensation after the invention has been done provides inefficient incentives. Efficient incentives would require the compensation to be fixed ex-ante, as it is provided by both the proposed law (concerning employees in general) and the new law (concerning university scholars). However, both set the payment schemes in an inefficient way. With suboptimal incentives to spend effort into inventions, the government's goal, an increase in the number of patents, is likely to be missed. -- Dieser Beitrag befaßt sich mit der geplanten und zum Teil schon verwirklichten Reform des Gesetzes über Arbeitnehmererfindungen (ArbEG). Im Mittelpunkt steht die bisher in der Literatur wenig beachtete Analyse der Anreize, die sich aus der Zahlung einer Vergütung durch den Arbeitgeber ergeben. Art und Höhe der Vergütung beeinflussen sowohl das Anstrengungsniveau des Arbeitnehmers bei der Erstellung, als auch das des Arbeitgebers bei der Verwertung der Erfindung. Unsere Analyse basiert auf einem einfachen Prinzipal-Agenten-Modell und verbindet Aspekte des Moral Hazard mit der Hold-Up-Problematik. Es werden zwei Szenarien vorgestellt, die sich bezüglich des Zeitpunktes und der Art der Festlegung der Vergütung unterscheiden. Es wird ein eindeutiges effizientes Ergebnis hergeleitet: Die Vergütung von Arbeitnehmererfindungen sollte sich auf die einmalige Zahlung einer festen Vergütung beschränken, die ex ante festzulegen ist. Gemessen an diesem Ergebnis kann die untersuchte Gesetzesnovelle nur als second best-Lösung eingeschätzt werden.Moral hazard,hold-up,efficient fixed wage

Evaluating public expenditures when governments must rely on distortionary taxation

Anderson and Martin provide simple, robust rules for evaluating public spending in distorted economies. Their analysis integrates, within a clean unified framework, previous treatments of project evaluation as special cases. In this paper, the authors use a general system of fiscal accounting for marginal changes in the provision of public that allows them to account for various approaches to the funding of government projects. They obtain two key results that seem likely to be useful for project evaluation. Firstly, the shadow prices of traded (as well as non-traded) goods are not generally equal to their world prices, but differ from world prices by an amount that depends upon the impact of the project on government revenues and on the Marginal Cost of Funds (MCF). Secondly, the costs of a government project need to be adjusted by the Marginal Cost of Funds before being compared with the benefits accruing from the project. The analysis leads to operational rules for project evaluation that are only slightly more complex than the border pricing rule. To conduct the analysis, the authors utilize a framework that makes explicit the role of government in providing public goods and services subject to a budget constraint. They consider first in Section 1 a general welfare analysis of the provision of a public good which is purchased from the rest of the world and paid for out of distortionary tax revenue. In Section 2 they consider the nature of the resulting shadow prices in more detail. In Section 3 the authors consider the role of the MCF in evaluating the cost of project inputs. Section 4 deals with user charges for public goods, which are of course only feasible when such goods are excludable. Section 5 places the results in the context of the earlier literature in order to clarify the relationship between their results and those obtained by earlier authors. Section 6 provides some simple numerical examples to highlight the potential importance allowing for the costs of raising funds.Public Sector Economics&Finance,Environmental Economics&Policies,Markets and Market Access,Economic Theory&Research,Banks&Banking Reform,Public Sector Economics&Finance,Access to Markets,Markets and Market Access,Economic Theory&Research,Environmental Economics&Policies

X-ray Lightcurves from Realistic Polar Cap Models: Inclined Pulsar Magnetospheres and Multipole Fields

Thermal X-ray emission from rotation-powered pulsars is believed to originate from localized "hotspots" on the stellar surface occurring where large-scale currents from the magnetosphere return to heat the atmosphere. Lightcurve modeling has primarily been limited to simple models, such as circular antipodal emitting regions with constant temperature. We calculate more realistic temperature distributions within the polar caps, taking advantage of recent advances in magnetospheric theory, and we consider their effect on the predicted lightcurves. The emitting regions are non-circular even for a pure dipole magnetic field, and the inclusion of an aligned magnetic quadrupole moment introduces a north-south asymmetry. As the aligned quadrupole moment is increased, one hotspot grows in size before becoming a thin ring surrounding the star. For the pure dipole case, moving to the more realistic model changes the lightcurves by $5-10\%$ for millisecond pulsars, helping to quantify the systematic uncertainty present in current dipolar models. Including the quadrupole gives considerable freedom in generating more complex lightcurves. We explore whether these simple dipole+quadrupole models can account for the qualitative features of the lightcurve of PSR J0437$-$4715.Comment: 12 pages, 9 figure

Developmental divergence: motor trajectories in children with fragile X syndrome with and without co-occurring autism.

BackgroundAutism spectrum disorder (ASD) is highly prevalent in fragile X syndrome (FXS), affecting 50-70% of males. Motor impairments are a shared feature across autism and FXS that may help to better characterize autism in FXS. As motor skills provide a critical foundation for various language, cognitive, and social outcomes, they may serve an important mechanistic role for autism in FXS. As such, this study aimed to identify differences in motor trajectories across direct assessment and parent-report measures of fine and gross motor development between FXS with and without autism, and typical development, while controlling for cognitive functioning.MethodsThis prospective longitudinal study included 42 children with FXS, 24 of whom also had ASD (FXS + ASD), as well as 40 typically developing children. The Mullen Scales of Early Learning provided a direct measure of fine and gross motor skills, and the Vineland Adaptive Behavior Scales provided a measure of parent-reported fine and gross motor skills. Random slopes and random intercepts multilevel models were tested to determine divergence in developmental motor trajectories between groups when controlling for cognitive level.ResultsModel results indicated the children with FXS + ASD diverged from TD children by 9-months on all measures of gross and fine motor skills, even when controlling for cognitive level. Results also indicated an early divergence in motor trajectories of fine and gross motor skills between the FXS + ASD and FXS groups when controlling for cognitive level. This divergence was statistically significant by 18 months, with the FXS + ASD showing decelerated growth in motor skills across direct observation and parent-report measures.ConclusionsThis study is the first to examine longitudinal trends in motor development in children with FXS with and without comorbid ASD using both direct assessment and parent-report measures of fine and gross motor. Furthermore, it is among the first to account for nonverbal cognitive delays, a step towards elucidating the isolated role of motor impairments in FXS with and without ASD. Findings underscore the role of motor impairments as a possible signal representing greater underlying genetic liability, or as a potential catalyst or consequence, of co-occurring autism in FXS