Wolfgang Gick

Little Firms and Big Patents: A Model of Small‐Firm Patent Signaling

Patent strategies of small technology-intensive firms are difficult to explain with standard incentive arguments based on intellectual property rights. This paper develops a rationale for patent filing as a disclosure strategy. We develop a two-sender signaling game to study patenting incentives of two technology start-ups to file in a large-scale patent system with the goal to attract a user firm. Both start-ups may decide to invest in costly modification of their patent application before filing. The paper identifies a separating equilibrium in which the high-quality inventor files and so separates from its technology competitor. Of particular interest is the study of pooling and semi-separating equilibria, as well as the impact of subsidies. We find that a higher quality of a countrys inventions, reflected in the possible innovative steps and thus in higher expected profits for foreign user firms, may increase the chance of the relatively lower-quality inventor to enter international technology markets.

Optimal Disclosure of Supervisory Information in the Banking Sector

The game-theoretical analysis of this paper shows that stress tests that cover the entire banking sector (macro stress tests) can be performed by institutional supervisors to improve welfare. In a multi-receiver framework of Bayesian persuasion we show that a banking authority can create value when committing to disclose the stress-testing methodology (signal-generating process) together with the stress test result (signal). Disclosing two pieces of information is a typical procedure used in stress tests. By optimally choosing these two signals, supervisors can deliver superior information to prudent investors and enhance welfare. The paper offers a new theory to explain why stress tests are generally welfare enhancing. We also offer a treatment of the borderline case where the banking sector is hit by a crisis, in which case the supervisor will optimally disclose an uninformative signal.

Platforms or Franchisors? Two Contractual Forms When Consumers Care About Quality

Platform markets (two-sided markets) tend to be analyzed in the context of pricing frameworks. Scant attention has been paid to a complementary line of thought, which is based on the observation that in many cases enhancing the quality of goods and services running on the platform may be as important for platform markets as getting the prices right. This paper analyzes two contracting choices that a platform intermediary (program designer) may have to solve the inherent problems of moral hazard and adverse selection. Specifically, the intermediary needs to incentivize a developer (seller) to ex ante invest in quality development for his product or service since consumers expect high-quality applications. In line with the emerging literature on platform rules and regulation we identify two contractual forms: a vertically integrated platform mode of contracting that involves a relatively closer contractual relationship where the platform intermediary charges the consumers, and the fixed-fee franchise contract in which the platform charges the developer and the latter sells directly to the consumers. While platform contracting shows second-best distortions in the optimal contract, the fixed-fee contract generally achieves a first-best solution but is limited to a setting with a risk-neutral developer.

Challenges for management development in the German‐speaking nations for the twenty‐first century

Close inspection reveals subtle differences in managerial style and culture within Austria, Germany and Switzerland. Foreign management development (MD) practitioners are more likely to be impressed by the management and cultural similarities within the German‐speaking nations, especially when contrasted with the North American model. While many of the MD techniques used in the German‐speaking areas will be familiar to North American practitioners, not all foreign MD techniques are directly applicable to management in the German‐speaking region. Nonetheless, these countries face familiar challenges in developing managers into the twenty‐first century. These countries need managers who can cope with rapid change, manage innovation and new technologies, develop their human resource and management skills, face globalisation, deal with information technology, as well as manage teams and external workforces. Many of these areas offer opportunities for foreign MD practitioners. Promoting intercultural development could be a strong argument for exposing German‐nation managers to foreign MDPs

Platform Contracting and Exclusivity

Platforms care about the quality of components they host. For example, a computer operating system is more popular - and thus more profitable - when the software is high quality. Some platforms offer special arrangements to high-quality firms - for example, Apple promotes high-quality Macintosh software on the Apple website. Others shut out low-quality firms completely. Nintendo has established a reputation for screening out low quality games from their game console. Finally, some platforms require exclusive contracts, whereby a component cannot be made available on any other platform, many TV sports programming contracts are designed this way. We study the contract design options of a platform owner offering a screening contract to a component developer who should be incentivized to deliver a particular quality level. When dealing both with adverse selection (component quality types are not known to the platform ex ante) and moral hazard (efforts to improve the component or offer customer service are not observable to the platform), the platform will use additional allocative distortion compared to the standard screening contract. Of particular interest is our finding that under exclusivity, when high-quality components require a higher participation rent, there is less allocative distortion, permitting a new interpretation of countervailing incentives in a platform-contracting environment.