Ana I. Saracho

Patent Licensing Under Strategic Delegation

The modern corporation is characterized both by a separation of ownership from management and by managerial incentives that often include strategic elements in addition to the standard incentive elements. Despite the importance of these two features in the agency and corporate-governance literatures, they are absent in the treatment of the firm in the patent-licensing literature. The analysis in this paper shows how, by simply taking into account these two features of the modern corporation, it is possible to offer a new explanation for the use of royalties in licensing agreements. Copyright (c) 2002 Massachusetts Institute of Technology.

Innovation diffusion subsidies: Supply without precommitment ability and welfare

This paper extends the theoretical analysis of the effects of innovation diffusion subsidies. Assuming that: (i) the seller cannot precommit to future sale prices, (ii) buyers have rational expectations, (iii) the subsidies may change over time and (iv) adoption levels remain below the efficient ones, it is shown that subsidies may decrease social welfare. Furthermore, when a percentage of the sale price is subsidized both the rhythm and final extent of diffusion may be reduced and the surplus of the innovation adopters may diminish. These results are specially relevant for diffusion policies as governments do not usually have information about the demand for the innovation and/or the new technology’s production costs. The paper also shows that a public agency with complete information may achieve a given welfare level in a cheaper way by using fixed quantity subsidies rather than subsidy rates.

The supercore for normal-form games

We study the supercore of a system derived from a normal form game. For the case of a finite game with pure strategies, we define a sequence of games and show that the supercore of that system coincides with the set of Nash equilibrium strategy profiles of the last game in the sequence. This result is illustrated with the characterization of the supercore for the n-person prisoners٠dilemma. With regard to the mixed extension of a normal form game, we show that the set of Nash equilibrium profiles coincides with the supercore for games with a finite number of Nash equilibria. For games with an infinite number of Nash equilibria this need not be no longer the case. Yet, it is not difficult to find a binary relation which guarantees the coincidence of these two sets.