Rent-seeking with scarce talent: a model of preemptive hiring

In the standard model of a rent-seeking contest, firms optimally employ resources in an attempt to win the contest and obtain the rent. Typically, it is assumed that these resources may be hired at any desired level at some fixed, exogenous per-unit cost. In many real-world rent-seeking contests, however, these resources consist of scarce, talented individuals. We model a rentseeking contest in which the talent available for employment is scarce and in which the rent obtained from winning the contest may also differ from participant to participant. Talent scarcity leads to preemptive hiring by the player receiving the larger rent. In the traditional analysis, as the size of the rents converges, the levels of effort and the probability of winning also converge. By contrast, when talent is scarce, the player receiving the larger rent hires it all and wins the contest with probability 1. This is true even if the difference in rents is small. Interestingly, this outcome may be Pareto-inferior to the outcome associated with the interior Nash equilibrium. We also characterize the condition under which talent ceases to be scarce. For a simple rentseeking game, this requires at least 50% more talent than is employed at the interior Nash equilibrium.rent-seeking, scarce talent, labor market, lobbying, preemptive hiring

Litigation with Negative Expected Value Suits: An Experimental Analysis

The existence of lawsuits providing plaintiffs a negative expected value (NEV) at trial has important theoretical implications for signaling models of litigation. The signaling equilibrium possible absent NEV suits breaks down with NEV suits because plaintiffs do not have a credible threat to proceed to trial undermining the ability to signal type. Using a laboratory experiment, we analyze behavior with and without the possibility of NEV suits. Absent NEV suits, behavior largely follows predicted patterns. However, the possibility of NEV suits does not cause the signaling equilibrium to unravel and does not cause the dispute rate to increase. Plaintiffs only drop NEV lawsuits three-fourths of the time, the rejection rate by defendants for revealing demands rises less than predicted and, contra theory, the rejection rate on demands in the semi-pooling range remains unchanged

Party polarization, political alignment, and federal grant spending at the state level

Research on the distribution of federal expenditures has provided mixed evidence showing that states with more legislators who belong to the president’s party and states with more legislators in the chamber majority tend to receive a larger allocation of federal funds. We add to this research by considering how political polarization and political alignment impact these presidential and congressional determinants of how the domestic US budget is distributed to the states. Our results show that states with a larger percentage of senators in the majority can secure a larger share of federal grant expenditures per capita when political polarization is relatively low

Leishmania aethiopica cell‐to‐cell spreading involves caspase‐3, AkT, and NF‐κB but not PKC‐δ activation and involves uptake of LAMP‐1‐positive bodies containing parasites

Development of human leishmaniasis is dependent on the ability of intracellular Leishmania parasites to spread and enter macrophages. The mechanism through which free promastigotes and amastigotes bind and enter host macrophages has been previously investigated; however, little is known about intracellular trafficking and cell-to-cell spreading. In this study, the mechanism involved in the spreading of Leishmania aethiopica and Leishmania mexicana was investigated. A significant increase in phosphatidylserine (PS) exhibition, cytochrome C release, and active caspase-3 expression was detected (P < 0.05) during L. aethiopica, but not L. mexicana spreading. A decrease (P < 0.05) of protein kinase B (Akt) protein and BCL2-associated agonist of cell death (BAD) phosphorylation was also observed. The nuclear factor kappa-light-chain enhancer of activated B cells (NF-kB) signaling pathway and pro-apoptotic protein protein kinase C delta (PKC-δ) were downregulated while inhibition of caspase-3 activation prevented L. aethiopica spreading. Overall suggesting that L. aethiopica induces host cell’s apoptosis during spreading in a caspase-3-dependent manner. The trafficking of amastigotes within macrophages following cell-to-cell spreading differed from that of axenic parasites and involved co-localization with lysosomal-associated membrane protein 1 (LAMP-1) within 10 min postinfection. Interestingly, following infection with axenic amastigotes and promastigotes, co-localization of parasites with LAMP-1-positive structures took place at 1 and 4 h, respectively, suggesting that the membrane coat and LAMP-1 protein were derived from the donor cell. Collectively, these findings indicate that host cell apoptosis, demonstrated by PS exhibition, caspase-3 activation, cytochrome C release, downregulation of Akt, BAD phosphorylation, NF-kB activation, and independent of PKC-δ expression, is involved in L. aethiopica spreading. Moreover, L. aethiopica parasites associate with LAMP-rich structures when taken up by neighboring macrophages

Intellectual Property Rights, Parallel Imports and Strategic Behavior

The existence of parallel imports (PI) raises a number of interesting policy and strategic questions, which are the subject of this survey article. For example, parallel trade is essentially arbitrage within policy-integrated markets of IPR-protected goods, which may have different prices across countries. Thus, we analyze fully two types of price differences that give rise to such arbitrage. First is simple retail-level trade in horizontal markets because consumer prices may differ. Second is the deeper, and more strategic, issue of vertical pricing within the common distribution organization of an original manufacturer selling its goods through wholesale distributors in different markets. This vertical price control problem presents the IPR-holding firm a menu of strategic choices regarding how to compete with PI. Another strategic question is how the existence of PI might affect incentives of IPR holders to invest in research and development (R&D). The global research-based pharmaceutical firms, for example, strongly oppose any relaxation of restrictions against PI of drugs into the United States, arguing that the potential reduction in profits would diminish their ability to innovate. There is a close linkage here with price controls for medicines, which are a key component of national health policies but can give rise to arbitrage through PI. We also discuss the complex economic relationships between PI and other forms of competition policy, or attempts to limit the abuse of market power offered by patents and copyrights. Finally, we review the emerging literature on how policies governing PI may affect international trade agreements