Emeric Henry

Distributional and Efficiency Impacts of Gasoline Taxes: An econometrically-based multi-market study

Because of its potential to improve the environment and enhance national security, reducing automobile-related gasoline consumption has become a major U.S. public policy issue. Recently, many analysts have called for new or more stringent policies to discourage gasoline consumption. Proposals include a tightening of corporate average fuel economy (CAFE) standards and subsidies to retirements of older (gasguzzling) vehicles, as well as increments to the federal gasoline tax (...).

STRATEGIC DISCLOSURE OF RESEARCH RESULTS: THE COST OF PROVING YOUR HONESTY*

In situations where a biased sender provides verifiable information to a receiver, in order to influence her decision, we study how strategic reporting affects the incentives to search for information. Research provides series of signals that can be used selectively in reporting. We show that the sender is strictly worse off when his research effort is not observed by the receiver: he has to conduct more research than in the observable case and in equilibrium, discloses all the information he obtained. However this extra research, conducted to prove the senders honesty, can be socially beneficial and mandatory disclosure of results can thus be welfare reducing. Finally we show that if the receiver is uncertain about the bias of the sender, withholding of results, including positive information, can occur in equilibrium.

Runner-Up Patents: Is Monopoly Inevitable?

Exclusive patents sacrifice product competition to provide firms incentives to innovate. We characterize an alternative mechanism whereby later inventors are allowed to share the patent if they discover within a certain time period of the first inventor. These runner-up patents increase social welfare under very general conditions. Furthermore, we show that the time window during which later inventors can share the patent should become a new policy tool at the disposal of the designer. This instrument will be used in a socially optimal mix with the breadth and length of the patent and could allow sorting between more or less efficient firms.

Competition and the Efficiency of Markets for Technology

The sale of R&D projects through licensing facilitates the division of labor between research and development activities. This vertical specialization can improve the overall efficiency of the innovative process. However, these gains depend on the timing of the sale: the buyer of an R&D project should assume development at the stage at which he has an efficiency advantage. We show that in an environment where the seller is overconfident about the value of the project, she may delay the sale to the more efficient firm in order to provide verifiable information about its quality, though this delay implies higher total development costs for the project. We obtain a condition for the equilibrium timing of licensing and examine how factors such as the intensity of competition between potential buyers influence it. We show that a wide array of different explanations, based on differences in information, beliefs or risk profiles, lead to the same qualitative results. We present empirical evidence from pharmaceutical licensing contracts that is consistent with our theoretical predictions.