Franco Cugno

Trade Secret vs. Broad Patent: The Role of Licensing

We present a simple model wherein a patents regime is inferior to a trade secrets system, meaning that when private returns from innovation under the two regimes are the same, society will be better off if the innovator chooses not to patent. In our model, trade secret licensing is envisaged and the inferiority of patents depends on the lack of an independent invention defense in patent law, while such a defense currently exists in secrecy and copyright law. Thus, although secrecy is superior to patents, it is not superior to other types of formal intellectual property rights where independent invention is allowed (such as copyrighted software).

Individual incentives by adjusting work hours: Bellamy's egalitarian economy☆

Abstract Edward Bellamy proposed an ideal egalitarian economy in which production is carried out as a nonprofit government service, income is shared equally by all individuals independently of work exertion, and relative work hours are used as incentives to allocate labor to different jobs. This economy is shown to possess an equilibrium consistent with full freedom of individual choice of occupation and consumption, to be achieved through a fully decentralized titonnement process. However, individuals have an obligation to work which deprives them of their freedom to choose between income and leisure, so that the scale of output is indeterminate and may be nonoptimal unless a social-welfare function is introduced.

Share Systems and Unemployment: A Theoretical Analysis.

Part 1: A historical precedent - sharecropping. Part 2 Basic models: alternative sharing schemes revenue sharing team piece rate sliding scale a wage-fund system. Part 3 The free access system. Part 4 The demand for capital in the share economy: excess demand for factors in long-run equilibrium the demand for capital with fixed compensation parameters. Part 5 Wage bargaining in the share economy: employment-restraining agreements under revenue sharing revenue sharing in an insider-outsider model revenue sharing in a monopoly union model. Part 6 Efficiency eages in the share economy: the supply of effort in a share system profit maximisation efficiency wage and the demand for labour market equilibrium and comparative statics gains and losses from revenue sharing. Part 7 Risk sharing in the share economy: privately superior wage contracts privately superior share contracts. Part 8 A discriminating share system: Meades blueprint the DLCP at work-problems and complications system stability and property rights.

Side payments, litigation risk and settlement outcomes

We offer a simple model of patent settlement for examining how litigation prospects, patent strength and expected damage awards affect consumer benefits stemming from settlement agreements providing for per-unit royalties and non-negative fixed fees. The result shows that consumers may be harmed if expected damage payments forgone by settlement lead to agreements with high royalty payments that benefit both the patent holder and licensee at the expense of the consumer.

Different Rules of Legal-Cost Allocation and Patent Hold-Up

We study how different rules of legal-cost allocation impact on negotiated royalties in an environment where patent hold-up is possible. The model assumes that the courts routinely grant stays of permanent injunctions to allow the infringers to redesign their products or deny injunctive reliefs outright. In these scenarios we consider the American system, where each party bear s its own costs, the British system, where the loser incurs all costs, and the system favoring the defendant, where the defendant pays its own costs if it loses and nothing otherwise. Our main conclusions are that when stayed injunctions are granted the system favoring the defendant provides the best results, while under denied injunctions the American system is preferable

Static Efficiency of Compulsory Licensing: The Role of Limit Pricing

A common argument against compulsory licensing of intellectual property maintains that it facilitates the entry of inefficient producers, which may reduce social welfare independently of any effects on R&D incentives. We study the issue in a model where the innovative firm, under the threat of compulsory licensing, reacts strategically by choosing between quantity and price competition. We show that the risk of a reduction in static welfare due to the entry of highly inefficient firms is avoided if licensing entails a royalty per unit of output and no fixed fees. The rationale behind this result lies in the fact that compulsory licensing threat works as a disciplining device to improve static social welfare, even when the applicant is a high cost inefficient firm. JEL codes: KOO, L49, 034.

The Welfare of Investment Deductibility Under a Flat Tax

This paper analyses the welfare effects of investment deductibility in a contest of endogenous growth generated by learning-by-doing and knowledge spillovers. We present a model where a set of revenue neutral fiscal policies, each characterized by different degrees of investment deductibility and different uniform tax rates on income, have been introduced. We show that, given the ratio of public expenditures to national product, partial investment deductibility turns out to be welfare enhancing when the intertemporal elasticity of substitution of consumption is sufficiently small. Our result means that a pure consumption tax-although ensuring more saving and faster growth-is not always preferable to a revenue neutral tax system in which both consumption and investment are taxed. Copyright Blackwell Publishing, Inc. 2002.

The Welfare Of Flat Tax

This paper analyses the welfare effects of flat tax in a context of endogenous growth generated by learning-by-doing and knowledge spillovers. We present a model where a set of revenue neutral fiscal policies, each characterised by different degrees of investment deductibility and different uniform tax rates on income, have been introduced. We show that, given the ratio of public expenditures to national product, partial investment deductibility turns out to be welfare enhancing when the intertemporal elasticity of substitution of consumption is sufficiently small. Our result means that a pure consumption tax

A Discriminating Share System

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Risk Sharing in the Share Economy

although ensuring more saving and faster growth