Bernhard Ganglmair

Patent Hold‐Up and Antitrust: How A Well‐Intentioned Rule Could Retard Innovation

Licensing technology essential to a standard can present a hold-up problem. After designing new products incorporating a standard, a manufacturer could be confronted by an innovator asserting patent rights to essential technology. A damages remedy provided by antitrust or some other body of law solves this hold-up problem, inducing the socially optimal level of investment by the manufacturer, but it can reduce the innovators licensing revenue and thereby retard innovation. The availability of an ex post damages remedy similarly alters the licensing terms in ex ante bargaining, with the result that fewer socially beneficial R\&D projects are undertaken.

Intrinsic Motivation, Discrimination and the Child Labor-Schooling Trade-Off: Some Empirical Findings

By explicitly taking the interdependence of the decisions over children’s labor and school attendance into account, we jointly estimate a two-equation system applying a bivariate probit model to data from Uganda. We argue that the correlation coecient of the equations’ error terms can be interpreted as the decision trade-o between child labor and schooling, and through a novel methodological approach we obtain evidence for substantial dierences across a number of comparison groups; in particular, we detect a gender, age and relationship bias. We add proxies to control for parental preferences based on self-reported answers from the survey data and find that intrinsic motivation can neither explain the gender nor the age bias implying that parents do not discriminate against their daughters or older children other than for mere economic reasons. The age bias seems mainly driven by cost-related factors and parents’ cost-sensitivity. We do, however, find conclusive evidence for discrimination against children who are not related to the household head, since the observed relationship bias is to some extent driven by parents’ intrinsic motivation.

Efficient Material Breach of Contract

I study the effect of a buyer’s right to reject a seller’s defective delivery when monetary compensation for such defects (breach of contract) is imperfect. Imperfect compensation has been shown to result in seller’s inefficient incentives to breach the contract. I show that a tailored right of rejection increases welfare, providing a rationale for legal doctrines that restrict rejection to defects that constitute “material breach” or a “substantial impairment” of the value of the good. Moreover, in equilibrium it does not matter whether the buyer is compensated for the lost profits accruing from the rejected good or not. Finally, I replicate the results in Stremitzer (2009) on pro-competitive effects but show that rejection with compensation is more effective in curbing the seller’s monopoly power than rejection without compensation. JEL classification: D23, D86, K12.

Cutthroats or comrades: Information sharing among competing fund managers

Informal exchange of information among competitors has been well-documented in a variety of industries, and ones expectation of reciprocity shown to be a key determinant. We use an indeterminate horizon centipede game to establish a feedback loop in the laboratory and show that an individuals beliefs about the recipients intentions to reciprocate matter more than a recipients ability to do so. This implies that reducing strategic uncertainty about a competitors behavior has a stronger effect on information flows than reducing environmental uncertainty (about the competitors ability). We further show results on the formation of beliefs and discuss managerial implications.