Vasileios Zikos

R&D Subsidies, Spillovers, and Privatization in Mixed Markets

We examine the use of subsidies to research and development (RD however, it does not lead to the equalization of per firm output and therefore to an efficient distribution of production costs. We also find that privatization of the public firm reduces R&D activity and welfare in the duopoly market. This result stands even when optimal R&D subsidies are provided.

R&D Collaboration Networks in Mixed Oligopoly

We develop a model of endogenous network formation in order to examine the incentives for R&D collaboration in a mixed oligopoly. Our analysis reveals that the complete network, where each firm collaborates with all others, is uniquely stable. When R&D subsidies are not available, in addition to the complete network, the private partial and the private-hub star networks are Pareto efficient. However, the complete network becomes the unique Pareto efficient network when R&D is subsidized. This result is in contrast with earlier contributions in private oligopoly where under strong market rivalry a conflict between stable and efficient networks is likely to occur. It also highlights the role of a public firm as policy instrument in aligning individual incentives for collaboration with the objective of efficiency, independently of whether R&D subsidies are provided by the regulator.

Retirement, Personality, and Well‐Being

This study investigates how two sources of individual heterogeneity — personality and gender — impact the well-being effects of retirement. Using data on older men and women from the British Household Panel Survey and its continuation, Understanding Society, we estimate the causal effect of retirement on satisfaction with overall life and domains of life in the presence of personality characteristics. As retirement is often considered to be a choice and thus may be endogenous to individual-level characteristics, we use the eligibility ages for basic state pension in the United Kingdom as instruments for retirement. We find that retirement increases leisure satisfaction of both males and females but not necessarily life satisfaction and income satisfaction. We further show that certain personality characteristics affect the well-being of female retirees. For males, however, personality does not seem to matter in how they cope with retirement.

Unions' and Firms' Attitudes Towards Research Joint Ventures: When Will the Incentives Be Aligned?

This paper studies the relationship between unionization and innovation activity. Under a unionized labour market, we find that when RD Journal compilation 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

Wage-Setting Institutions and R&D Collaboration Networks

We analyse how union structures that differ in the degree of wage-setting centralization affect the pattern of R&D network formation. Within the context of a three-firm industry, a central union that sets a uniform wage is shown to induce a partial R&D network that includes two firms but excludes the third. In contrast, we find that, under less centralized union structures, firms have incentives to form R&D networks with a larger number of alliances. This result is consistent with the stylised facts for industrialised countries: recent decades have seen an upsurge in R&D alliances along with labour market deregulation towards more flexible wage-setting institutions.

Endogenous Contracts in Unionized Oligopoly

We study the endogenous determination of contracts in a unionized oligopoly and the welfare implications thereof. Alternative contracts specify the sequencing in the selection of R&D and wages. They can be classified as ‘fixed’ when the unions set wages before the firms make their R&D decisions or ‘floating’ when the sequencing of these choices is reversed. If the unions are highly employment-oriented, we find that either all firm–union pairs choose floating-wage contracts or both contract types may coexist depending on the degree of technological spillovers. However, when the unions have stronger preference over attaining a good wage deal, then it becomes very likely that fixed-wage contracts will endogenously emerge because they can serve as an insurance device against oppor tunistic wage increases. Our welfare analysis suggests that welfare-improving contracts may nevertheless not always arise in equilibrium.

HAPPY PEOPLE ARE LESS LIKELY TO BE UNEMPLOYED: PSYCHOLOGICAL EVIDENCE FROM PANEL DATA

There is a large literature showing that unemployment reduces peoples well-being. Yet little is known about the reverse possibility, namely that well-being itself may influence unemployment propensity. Understanding the potentials of human well-being in relation to unemployment is important as many developed countries are currently facing high unemployment rates. As well-being is likely to be endogenous, we use British panel data and implement Lewbels novel empirical approach for identification. We show that higher well-being implies a negative causal effect on the probability of being unemployed. The result holds for two very different well-being measures: life satisfaction and a 12-item scale of mental health. As such, it provides new empirical evidence on the causal link between well-being and unemployment propensity. (JEL D03, I31)

Endogenous R&D networks when labour unions have preferences over wages and employment

We develop a model to analyse the pattern of R&D network formation when unions have relative preferences over wages and employment. Within a three-firm industry, we show that when the unions place a low weight on wages and technological spillovers are low, a partial R&D network that includes two firms but excludes the third emerges in equilibrium. In contrast, when the unions care a lot about wages, a complete R&D network that includes all firms emerges. For all other intermediate levels of union preferences over wages, there is no strong stable equilibrium network. Empirical implications emerge from these findings, which are also discussed.

International and National R&D Networks in Unionized Oligopoly

We study the endogenous formation of RD however, if spillovers are sufficiently high, the foreign partial network that includes a domestic and a foreign firm will arise. Moreover, for intermediate spillovers, no equilibrium network emerges. These results have implications for aggregate outcomes: equilibrium networks are not necessarily optimal in terms of aggregate effective R&D and aggregate firm profits.

Endogenous Free Trade Agreements and International R&D Networks: Free Trade Agreements and R&D Networks

In this paper, we develop a network formation game in order to study how free trade agreements among countries and R&D networks among firms emerge in equilibrium. Prior research showed that free trade agreements discourage the formation of international R&D networks under the assumption that trade tariffs are exogenous. In contrast, we allow for endogenous trade tariffs, and show that free trade agreements promote R&D collaboration between firms. In terms of efficiency, we find that although countries can achieve an outcome that is socially desirable, the number of R&D collaborations between firms is likely to be excessive from a social viewpoint.