1,721,039 research outputs found
Herd Behaviour in Adoption of Network Technologies
No full textherding, externalities, public information, technology adoption, D62, D80, L15,
Herd Behavior in Adoption of Network Technologies
No full textIn technology adoption, herd behavior can lead to a suboptimal outcome as shown, among others, by Choi (1997).However, empirics find little support for the idea that a less efficient technology can conquer the market and lock out a more efficient one. Accordingly, we improve and generalize Choi's results, by introducing an additional source of uncertainty: the economic environment. We investigate how the economic environment can affect herding and consequently the efficiency of the technology choice. The result is a smaller adoption bias. In the limit, firms may optimally experiment with the new technology that turns out to be social welfare improving
Innovation Diffusion and Strategic Outside Option in a Bargaining Game
No full textWe develop an optimal licensing model of a product innovation in which the (external) patent holder negotiates sequentially a two-part tariff contract with two potential licensees that have a positive and strategic outside option. We study the role of this strategic outside option in determining technology diffusion and efficiency of the bargaining. Although rich enough contracts allow the solution of the well known opportunism problem, the strategic outside option of the second negotiator implies deviation from industry profit maximization, which reduces the profitability of nonexclusive licensing. As a result, exclusive licensing still prevails under certain conditions. We extend our analysis to assess the profitability for the innovator to integrate vertically with either firm in the market. The internal patent holder always sells the innovation to the rival non-affiliate as a way to co-opt the latter and improve the profits of the former. As a result, vertical integration as compared with vertical separation may imply a positive quality improving effect. The private and social profitability of vertical integration depends on the type of bargaining between the negotiators and on the distribution of their bargaining power
Product innovation in a vertically differentiated model
Full text linkWe study the licensing incentives of an independent input producer
owning a patented product innovation which allows the downstream rms
to improve the quality of their nal goods. We consider a general two-part
tari¤ contract for both outside and incumbent innovators. We nd that
technology di¤usion critically depends on the nature of market competi-
tion (Cournot vs. Bertrand). Moreover, the vertical merger with either
downstream rm is always privately pro table and it is welfare improving
for large innovations: this implies that not all pro table mergers should
be rejected
Revealing incentives for compatibility provision in vertically differentiated network industries
Full text linkWe determine the incentives for compatibility provision of firms that produce network goods with different intrinsic qualities when firms do not have veto power over compatibility. When
network effects are strong, there are multiple equilibria in pricing and consumer decisions. We show that in some equilibria, it is the high quality firm that invests in compatibility, whereas in others, the low quality firm triggers compatibility. The socially optimal compatibility degree is zero, except under very strong network effects, where one of the equilibria has all consumers buying the low quality good. In this case, a partial degree of compatibility is optimal
Vertical integration smooths innovation diffusion
Full text linkDoes vertical integration of an input innovator with a downstream firm entail innovation foreclosure? We study
the licensing incentives of an independent input producer owning a patented product innovation which allows
the downstream firms to improve the quality of their final goods. We consider two-part tariff contracts for both
outside and incumbent innovators. We find that the incumbent innovator has always the incentive to license
its innovation to the rival firm so that under vertical integration complete technology diffusion takes place. In
contrast, the external patent holder may prefer exclusive licensing depending on the innovation size as well as
on the set of allowed contracts. As a result vertical integration does not entail innovation foreclosure, rather it
facilitates innovation diffusion with respect to vertical separation. As for the profitability, the vertical integration
with either downstream firm is always privately profitable and it is welfare improving for large innovations:
this implies that not all profitable mergers should be rejected
Building a firm level dataset for the analysis of industrial dynamics and demography
Full text linkThis paper illustrates the building procedure of a firm-level panel dataset that merges several sources of information concerning the various activities of business firms. The aim of this work is to achieve a detailed dataset able to shed light on firm demographics, in terms of survival, entry and exit processes, distinguishing between “voluntary" and “involuntary" exits. Moreover, the derived dataset allows to monitor the innovation activities of the firms and also to capture complementarities between two instruments of intellectual property rights (IPRs), namely granted patents and registered trademarks. We assess the validity of the proposed procedures resorting to the virtual universe of Italian limited liability companies as provided by Bureau van Dijk (BvD). The dataset covers more than 1 million companies operating in both manufacturing and service sectors and contain financial and economic information, as well as, among the others, the ownership structure and administrative procedures undergone by the firms, which may lead to firm exit.
The main purpose of the paper is to provide a unified set of procedures to help the researcher dealing with the vast amount of information available on corporate firms and of ever increasing size. This will also facilitate the replication of empirical analyses, across researchers working on dataset with similar characteristics, although from different countries or data providers
Concordance and complementarity in IP instruments
Full text linkThis work investigates the relationship between proxies of innovation activities, such as patents and trademarks, and firm performance in terms of revenues, growth, and profitability. By resorting to the virtual universe of Italian manufacturing and service firms, this work provides a rather complete picture of the Intellectual Property (IP) strategies pursued by Italian firms, in terms of patents and trademarks, and studies whether the two instruments for protecting IP exhibit complementarity or substitutability. In addition, and to our knowledge novel, we propose a measure of concordance (or proximity) between the patents and trademarks owned by the same firm and we then investigate whether such concordance exerts any effect on performance. The results suggest that while patents and trademarks independently exert a relevant impact on firm performance, there is no convincing evidence in favour of a complementary role of IP
Green monopoly and downward leapfrogging
No full textIn this paper we show that environmental consciousness may act as a substitute for environmental regulation. We consider a vertically differentiated duopoly in which the high quality firm pollutes more than the low quality rival. Consumers attach a positive value to the green firm, while stigmatizing the brown one. For relatively high values of this environmental concern, only the green firm is active in the market. When this happens, a downward leapfrogging mechanism takes place, leading to a recursive race to the bottom. At equilibrium, polluting emissions can be reduced to the level established by environmental agencies
Object-Oriented Bayesian Networks for firms' attitudes towards collusion
No full textThis paper shows how Object-Oriented Bayesian Networks can be used to model a duopolist decision process integrated with external market information. Both the relational structure and the parameters of the market behaviour model are estimated (learned) from a real dataset. Various decision scenarios are shown and discussed
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