Licensing of complementary technologies and enforcement of intellectual property rights

In this paper, we examine the effect of enforcement of IPR on the equilibrium outcome and welfare through unilateral and cross licensing decisions between duopolistic firms with patents of two complementary technologies. We find the conditions on both the imitation cost of the infringer and probability of the accuser firm winning the lawsuit under that a unilateral licensing / a cross licensing may be contracted between them, and efficient social surplus of duopoly realizes

Persistent inequality in a simple two sector model

This paper proposes a theory for the persistence of income inequality using a simple overlapping generations model with two consumption goods and two production sectors. There are two classes of workers, high and low skilled, each with a comparative advantage in a different type of production. Our model has a parameter range in which workers permanently specialize in the production type associated with their respective comparative advantages. This pattern of specialization leads to persistent income inequality, between skill classes, that is determined by the structure of demand for the two consumption goods. When the model is extended to a multi-sector framework, persistent inequality occurs under natural conditions on sector specific productivities. Finally this paper analyzes several egalitarian policies