{"title":"Pay‐for‐delay with settlement externalities","authors":"Emil Palikot, Matias Pietola","doi":"10.1111/1756-2171.12445","DOIUrl":"https://doi.org/10.1111/1756-2171.12445","url":null,"abstract":"Motivated by recent antitrust cases in the pharmaceutical industry, this article studies the interplay between pay-for-delay settlements, licensing deals and litigation. Our analysis highlights the externalities that they generate: pay-for-delay settlements reduce competition which encourages entry; licensing and litigation make entering less pro table. Faced with multiple entrants, the incumbent exploits these externalities by o ering licensing deals to some entrants or by pursuing litigation in order to decrease the cost of delaying contracts o ered to others. The number of delayed entrants increases with patent strength. Entrants without pay-for-delay settlements pursue litigation for patents of intermediate strength; otherwise, they receive licensing deals. ∗We are grateful to Patrick Rey, Yassine Lefouili, Marc Ivaldi, Doh-Shin Jeon, Bruno Jullien, Klaus Kultti, Massimo Motta, Jorge Padilla, Martin Peitz, Carl Shapiro, Juuso Välimäki, and participants at the 15th IIOC, the 12th CRESSE conference, and 44th EARIE conference, and seminars in the Aalto University and the Toulouse School of Economics, for helpful comments. Matias Pietola gratefully acknowledges nancial support from the Yrjö Jahnsson Foundation and the Finnish Cultural Foundation. Emil Palikot gratefully acknowledges support from the European Research Council under the Grant Agreement no. 340903. The working paper version of this article won the AdC Competition Policy Award 2018. †Toulouse School of Economics (TSE), University of Toulouse 1 Capitole, Toulouse, FRANCE, emil.palikot@gmail.com. ‡Toulouse School of Economics (TSE), University of Toulouse 1 Capitole, Toulouse, FRANCE, matias.pietola@iki. .","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49042810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The wrong kind of information","authors":"Aditya Kuvalekar, João Ramos, Johannes Schneider","doi":"10.1111/1756-2171.12440","DOIUrl":"https://doi.org/10.1111/1756-2171.12440","url":null,"abstract":"Agents, some with a bias, decide between undertaking a risky project and a safe alternative based on information about the project's efficiency. Only a part of that information is verifiable. Unbiased agents want to undertake only efficient projects, while biased agents want to undertake any project. If the project causes harm, a court examines the verifiable information, forms a belief about the agent's type, and decides the punishment. Tension arises between deterring inefficient projects and a chilling effect on using the unverifiable information. Improving the unverifiable information always increases overall efficiency, but improving the verifiable information may reduce efficiency.","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135473071","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Willingness to fight on: Environmental quality in dynamic contests","authors":"Haoming Liu, Jingfeng Lu, A. Salvo","doi":"10.1111/1756-2171.12435","DOIUrl":"https://doi.org/10.1111/1756-2171.12435","url":null,"abstract":"","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47069067","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Commitment and cheap talk in search deterrence","authors":"Siqi Pan, Xin Zhao","doi":"10.1111/1756-2171.12439","DOIUrl":"https://doi.org/10.1111/1756-2171.12439","url":null,"abstract":"","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47813247","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Bundling and nonlinear pricing in telecommunications","authors":"Yao Luo","doi":"10.1111/1756-2171.12437","DOIUrl":"https://doi.org/10.1111/1756-2171.12437","url":null,"abstract":"Abstract I develop a multiproduct nonlinear pricing model where a firm sells both discrete and continuous services to consumers with multidimensional heterogeneity. I derive the optimal selling mechanism and provide primitive conditions under which different bundling strategies arise. Exploiting both the firm and the consumer's optimality conditions, I show that the model structure is nonparametrically identified and propose a semiparametric estimation procedure. An application to China Telecom data shows that mixed bundling of internet and landline phone services is more beneficial to both the firm and the consumer relative to component pricing.","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136319681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Search, learning, and tracking","authors":"Marcel Preuss","doi":"10.1111/1756-2171.12430","DOIUrl":"https://doi.org/10.1111/1756-2171.12430","url":null,"abstract":"Abstract In many search markets, some consumers search to learn both the price and their willingness‐to‐pay whereas others search only to learn prices. When a seller can track indicators of the likelihood that consumers already know their willingness‐to‐pay, I show that price discrimination reduces profits and welfare relative to uniform pricing if search costs are small, but may increase both if search costs are large. The analysis also applies to sequential search if learning causes the likelihood that consumers know their willingness‐to‐pay to depend on the search history.","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":"209 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135474166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Stochastic contracts and subjective evaluations","authors":"Matthias Lang","doi":"10.1111/1756-2171.12432","DOIUrl":"https://doi.org/10.1111/1756-2171.12432","url":null,"abstract":"Abstract Subjective evaluations are widely used, but call for different contracts from classical moral‐hazard settings. Previous literature shows that contracts require payments to third parties. I show that the (implicit) assumption of deterministic contracts makes payments to third parties necessary. This article studies incentive contracts with stochastic compensation, like payments in stock options or uncertain arbitration procedures. These contracts incentivize employees without the need for payments to third parties. In addition, stochastic contracts can be more efficient and can make the principal better off compared to deterministic contracts. My results also address the puzzle about the prevalence of labor contracts with stochastic compensation.","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135907187","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Matthew effect, research productivity, and the dynamic allocation of NIH grants","authors":"Y. Qiu","doi":"10.1111/1756-2171.12433","DOIUrl":"https://doi.org/10.1111/1756-2171.12433","url":null,"abstract":"","PeriodicalId":51342,"journal":{"name":"Rand Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2023-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42667170","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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