University Invention, Entrepreneurship, and Start-Ups

This paper develops a game-theoretic model that predicts when a university invention is commercialized in a start-up firm rather than an established firm. The model predicts that university inventions are more likely to occur in start-ups when the technology transfer officers (TTOs) search cost is high, the cost of development or commercialization is lower for a start-up, or the inventor's effort cost in development is lower in a start-up. We test the theory using data from the Association of University Technology Managers, the National Research Council, and the National Venture Capital Association. Licensing is more likely in general, and especially so in start-ups, by universities with higher quality engineering faculty and older TTOs. Start-ups are more likely by universities in states with larger levels of venture capital. TTO size has no effect on start-ups, but does increase licenses. Conversely, universities that earn greater licensing royalties have fewer start-ups but more licenses. The number of start-ups is decreasing in the interest rate, increasing in the S&P 500, and unaffected by levels of industrial research funding and the presence of a medical school. All of these results are consistent with the predictions of our theory.

n-Channel Asymmetric Multiple-Description Lattice Vector Quantization

We present analytical expressions for optimal entropy-constrained multiple-description lattice vector quantizers which, under high-resolutions assumptions, minimize the expected distortion for given packet-loss probabilities. We consider the asymmetric case where packet-loss probabilities and side entropies are allowed to be unequal and find optimal quantizers for any number of descriptions in any dimension. We show that the normalized second moments of the side-quantizers are given by that of an $L$-dimensional sphere independent of the choice of lattices. Furthermore, we show that the optimal bit-distribution among the descriptions is not unique. In fact, within certain limits, bits can be arbitrarily distributed.Comment: To appear in the proceedings of the 2005 IEEE International Symposium on Information Theory, Adelaide, Australia, September 4-9, 200

Patent Licensing and the Research University

We construct a dynamic model of university research that allows us to examine recent concerns that financial incentives associated with university patent licensing are detrimental to the traditional mission of US research universities. We assume a principal-agent framework in which the university administration is the principal and a faculty researcher is the agent. Whether or not the researcher remains in the university, and if so her choice of the amount of time to spend on basic and applied research, is complicated by the fact that she earns license income and prestige both inside and outside the university. Thus in contrast to usual principal agent models the participation constraint is endogenous. This, plus the fact that current research affects future knowledge stocks, allows us to show that it is far from obvious that licensing will damage basic research and education.

Smuggling, Camouflaging, and Market Structure

We examine how market structure and enforcement affect smuggling and welfare in a model where smuggling is camouflaged by legal sales. Conditions are given for when some, but not necessarily all, firms smuggle. With camouflaging, the market price is below the price when all sales are legal, so smuggling improves welfare if the price effect outweighs excess smuggling cost. This welfare effect is directly related to the degree of competition. Increased enforcement in this model potentially reduces welfare. The model is shown to be consistent with evidence on cigarette smuggling in the United States for 1975-1982.