The paper defines, implements and compares two empirical tests of relevant markets. While the traditional SSNIP test compares an initial industry equilibrium to an out-of-equilibrium situation, the FERM test, our contribution, compares the same initial equilibrium to an other equilibrium...

Software security is a major concern for vendors, consumers, and regulators since attackers that exploit vulnerabilities can cause substantial damages. When vulnerabilities are discovered after the software has been sold to consumers, the firms face a dilemma. A policy of disclosing...

This paper is a study of licensing in a patent thicket. In a patent thicket licensing allows firms to avoid hold-up. It will have different effects on firms' R&D incentives depending on whether firms license existing or future patents. Building on a model of a patent portfolio race, firms'...

Licensing in a patent thicket allows firms to either avoid or resolve hold-up. Firms’ R&D incentives depend on whether they license ex ante or ex post. We develop a model of a patent portfolio race, which allows for endogenous R&D efforts, to study firms’ choice between ex ante and ex post...

Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less...

A firm's productivity depends on how production is organized given the level of demand for its product. To capture this mechanism, we develop a theory of an economy where firms with heterogeneous demands use labor and knowledge to produce. Entrepreneurs decide the number of layers of management...

This paper offers a unique quantitative evaluation of the distribution of the welfare of a water privatization experience in Mali among labor, investors, intermediate input providers, users and taxpayers. The assessment is based on indicator duality and production theory. The paper shows that...

In this paper we use data on five social inclusion indicators (poverty, inequality, unemployment, education and health) to assess and compare the performance of 27 European welfare states (EU27) in 2008. Aggregate measures of performance are obtained using index number methods similar to those...

This paper considers the incentives of oligopolistic firms to diversify into technologically related markets when there are diseconomies of scope. There is a rent-extraction incentive for firms to adopt flexible technologies, which enable them to enter technologically related markets, thereby...

We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that...