Intellectual Property Protection and Innovation

Well-designed and enforceable intellectual property rights (IPRs) provide economic incentives for research and development (R&D). Despite the apparent benefits to the existence of strong IPRs, many countries have a poor record in IPR protection. This paper develops a game-theoretic model of heterogeneous producers and endogenous innovators to analyze the causes and consequences of IPR infringement. Analytical results show that IPR infringement affects pricing and welfare in the market. The optimal IPR protection for the government depends not only on the pricing decision of the innovator, but also on its country size and its conjecture about the policy of other governments. A government can only use IPR protection as a strategic trade policy tool if the innovator can price discriminate.Research and Development/Tech Change/Emerging Technologies,

Corruption: Democracy, Autocracy, and Political Stability

The recent empirical literature on corruption has identified a long list of variables that correlate significantly with corruption but only five were distinguished by Leamer’s Extreme Bounds Analysis as robust to various samples, measures of corruption, and regression specifications. Among these five factors that were found to reduce corruption are decades-long tradition of democracy and political stability. In today’s world, however, there are many countries that combine one of these two robust determinants of corruption with the opposite of the other: politically stable autocracies or newly formed and unstable democracies. The central question raised in this paper is: Is it worth, in terms of corruption, for a country to trade stability with autocratic rule for political freedoms but with transitional instability? We find that the answer to this question is in the affirmative - the level of corruption is indeed lower in unstable democracies than in stable dictatorships. Our results are robust to various measures of corruption, alternative regressor indices, and regression specifications.corruption, democracy, autocracy, dictatorship, political stability

Farm Bill 2014: An Experimental Investigation of Conservation Compliance

Leading up to the 2014 Farm Bill, the House of Representatives and the Senate proposed alternative changes to the incentive structure for farmer conservation efforts. While both include crop insurance subsidies, the version proposed by the Senate made such subsidies conditional on conservation efforts. This study uses experimental methods to analyze the efficacy of these two alternative designs in comparison to the previous, 2008 Farm Bill, design and investigates in how far additional nudging for empathy can improve on the efficiency. The results support the contention that solely offering financial incentives, as is the case in the 2014 Farm Bill, leads to crowding-out of intrinsic motivations and hence may be counterproductive. Similarly, nudging for empathy by itself is relatively ineffective. Nudging in conjunction with financial incentives, however, has a statistically and economically significant and positive impact on conservation behavior and may therefore offer a relatively cheap way to improve the efficiency of conservation-related legislative efforts

Empathy Conservation: What Did We Learn From the Experiments Testing the Metaeconomic Framework and Dual-interest Theory?

This article summarizes our experimental research testing the metaeconomics framework (MEF) and dual-interest theory (DIT), which suggests an im-portant and substantive role for empathy in the design of conservation policy to achieve sustaina-bility (for more detail, see http://agecon-cpanel.unl.edu/lynne/metaecon/Lynneetal2014TragedyCommons.pdf ) MEF and DIT posit that individuals are motivated by two inseparable, yet conflicting interests: self-interest and other (shared with others)-interest. This conflict gets resolved through empathy tem-pering self-interest, resulting in a balanced decision, in which neither of the interests is maximized, but we rather observe sacrifices in both inter-ests. Empathy is based on imagining the struggle of others, on “walking-in-the-shoes-of-others” and, as a result, perhaps joining in sympathy with a shared cause like conservation and sustainability

Empathy Nudging as a New Component of Conservation Programs

In this article we continue discussing our vision for appealing to other than self-interest-only (profit maximization) in public policies on conservation of farming land. We look specifically at the downstream water pollution problem (i.e. agricultural practices of upstream farmers leading to soil erosion and chemical/fertilizer runoff, which results in poor water quality downstream). We are trying to find less costly solutions which will result in farmers using conservation technologies that decrease the impact of their agricultural practices on downstream rivers and lakes. One possible solution is to nudge for empathy, to encourage the farmers to consider the results of their choices from the perspective of the affected people, to encourage them to walk in the shoes of people who carry the negative effect of the pollution. As a result of doing so, these farmers might then join in the shared cause of improved water quality downstream, and change farming practices upstream, with lower costs overall

Big Bang vs. Gradualism – A Productivity Analysis

In the beginning of the 1990s, the former socialist countries of Eastern Europe and the Soviet Union began reforming their economies. Yet despite two decades of research, it is still unclear which reform path – gradual or radical – is better for long-run growth. Unlike most other studies on the topic, which concentrate on the growth of output per capita, this paper compares the two alternative reform approaches based on the analysis of productivity. We estimate a Malmquist multifactor productivity index for 22 transition economies over 17 years to compare their relative performance depending on their speed of reform. The Malmquist index is further decomposed into efficiency and technological change, and statistical inference is obtained using a smoothed bootstrap procedure. The main results are that the radical reformers exhibit higher rates of productivity growth in the initial years of transition, while the gradual countries do better in the later years. Over the whole time period a gradual reform strategy is superior to faster reforms. These findings have important implications for reforms in the remaining non-market economies and many developing countries

Edge Partitions of Optimal 22-plane and 33-plane Graphs

A topological graph is a graph drawn in the plane. A topological graph is $k$-plane, $k>0$, if each edge is crossed at most $k$ times. We study the problem of partitioning the edges of a $k$-plane graph such that each partite set forms a graph with a simpler structure. While this problem has been studied for $k=1$, we focus on optimal $2$-plane and $3$-plane graphs, which are $2$-plane and $3$-plane graphs with maximum density. We prove the following results. (i) It is not possible to partition the edges of a simple optimal $2$-plane graph into a $1$-plane graph and a forest, while (ii) an edge partition formed by a $1$-plane graph and two plane forests always exists and can be computed in linear time. (iii) We describe efficient algorithms to partition the edges of a simple optimal $2$-plane graph into a $1$-plane graph and a plane graph with maximum vertex degree $12$, or with maximum vertex degree $8$ if the optimal $2$-plane graph is such that its crossing-free edges form a graph with no separating triangles. (iv) We exhibit an infinite family of simple optimal $2$-plane graphs such that in any edge partition composed of a $1$-plane graph and a plane graph, the plane graph has maximum vertex degree at least $6$ and the $1$-plane graph has maximum vertex degree at least $12$. (v) We show that every optimal $3$-plane graph whose crossing-free edges form a biconnected graph can be decomposed, in linear time, into a $2$-plane graph and two plane forests