Stable profit sharing in a patent licensing game: general bargaining outcomes

Watanabe, N., & Muto, S. (2008). Stable profit sharing in a patent licensing game: general bargaining outcomes. International journal of game theory, 37(4), 505-523. [working paper 版]

JEL Classification Numbers: C71; D45; D43
Keywords: licensing, coalition structure, bargaining set, core

==noted by yi-nung==

有簡要的 patent licensing problem 的文獻回顧:

Patent licensing problems in oligopolistic markets had been studied only by non-cooperative mechanisms; upfront fee or royalty in Kamien and Tauman (1984, 1986), and auction in Katz and Shapiro (1985, 1986). After these seminal papers, the main concern of researchers was focused on the optimal licensing mechanism that maximizes the licensor’s revenue from a patented technology (See, e.g., Kamien, Oren and Tauman (1992), Muto (1993), Sen (2005) and Sen and Tauman (2007)). On the other hand, licensing agreements are basically contract terms signed by licensors and licensees as negotiation results. This paper hence seeks into the original and practical viewpoint and studies patent licensing as bargaining outcomes.
On this agenda, Tauman and Watanabe (2007, hereafter TW) recently provided the licensor’s payoff in the non-cooperative auction game with an interpretation from a cooperative viewpoint. Their analysis was, however, limited to the asymptotic equivalence. In practice, however, each industry has a finite number of firms operating there. For such a finite industry, Driessen, Muto and Nakayama (1992, hereafter DMN) studied a cooperative game on information trading which is similar to patent licensing。

Group contests of incomplete information

Date: 2014-09
By: Philip Brookins (Department of Economics, Florida State University)
Dmitry Ryvkin (Department of Economics, Florida State University)
We prove the existence of monotone pure strategy Bayesian equilibria in two types of contests between groups under incomplete information: (i) individual-level private information group contests, where each player only knows her own ability, and (ii) group-level private information group contests, where each player knows the abilities of all members of her group. In the latter case, we also show that the equilibrium is unique. We provide the results of exploratory numerical computations and discuss the qualitative properties of the equilibria.
Keywords: contest, group, incomplete information
JEL: D72 C72 C02

Consumer information networks

==noted by yi-nung==
Date: 2014-06
This paper examines the informativeness of consumer information networks and their effect on price competition between .rms. Under the proposed information mechanism, consumers share their initial information with the members of their network and as such become better informed. The main result of this paper shows how informative such networks are by characterizing how many different pieces of information a network is likely to contain. This informativeness is crucial for the degree of competition, as consumers comparing more prices induce firms to compete more fiercely. We find that larger networks imply better information transmission, which intensifies competition and decreases all the percentiles of the price distribution. An increase in the number of firms makes networks more informative, and decreases all the percentiles as well. Our results are robust to the introduction of sequential search and network segregation, but an increase in segregation decreases information transmission and increases all percentiles.

Communication networks in markets

Date: 2014-08-26
By: Edoardo Gallo
This paper proposes a dynamic model of bargaining to analyze decentralized markets where buyers and sellers obtain information about past deals through their social network. There is a unique equilibrium outcome which depends crucially on the peripheral (least connected) individuals in each group. The main testable predictions are that groups with high density and/or low variability in the number of connections across individuals allow their members to obtain a better deal. These predictions are tested in a lab experiment through 4 treatments that vary the network that groups of 6 subjects are assigned to. The results of the experiment lend support to the theoretical predictions: subjects converge to a high equilibrium demand if they are assigned to a network that is dense and/or has low variability in number of connections across members. An extension explores an alternative set-up in which buyers and sellers belong to the same social network: if the network is regular and the agents are homogeneous then the unique equilibrium division is 50-50
Keywords: network, communication, experiment, noncooperative bargaining, 50-50 division
JEL: C73 C78 C91 C92 D83

Seeing is believing ? evidence from an extension network experiment

Date: 2014-08-01
By: Kondylis, Florence
Mueller, Valerie
Zhu, Siyao Jessica
Extension services are a keystone of information diffusion in agriculture. This paper exploits a large randomized controlled trial to track diffusion of a new technique in the classic Training and Visit (T&V) extension model, relative to a more direct training model. In both control and treatment communities, contact farmers (CFs) serve as points-of-contacts between agents and other farmers. The intervention (Treatment) aims to address two pitfalls of the T&V model: i) infrequent extension agent visits, and ii) poor quality information. Treatment CFs receive a direct, centralized training. Control communities are exposed to the classic T&V model. Information diffusion was tracked through two nodes: from agents to CFs, and from CFs to others. Directly training CFs leads to large gains in information diffusion and adoption, and CFs learn by doing. Diffusion to others is limited: other males adopt the technique perceived as labor saving, with an effect size of 75 percent.
Keywords: Agricultural Knowledge and Information Systems,Rural Development Knowledge&Information Systems,Crops and Crop Management Systems,Population Policies,Housing&Human Habitats

Two-Stage Allocation Rules

Date: 2013-12
By: Nils Roehl (University of Paderborn)
Suppose some individuals are allowed to engage in different groups at the same time and they generate a certain welfare by cooperation. Finding appropriate ways for distributing this welfare is a non-trivial issue. The purpose of this work is to analyze two-stage allocation procedures where first each group receives a share of the welfare which is then, subsequently, distributed among the corresponding members. To study these procedures in a structured way, cooperative games and network games are combined in a general framework by using mathematical hypergraphs. Moreover, several convincing requirements on allocation procedures are discussed and formalized. Thereby it will be shown, for example, that the Position Value and iteratively applying the Myerson Value can be characterized by similar axiomatizations.
Keywords: Allocation Rules, Economic and Social Networks, Hypergraphs, Myerson Value, Position Value
JEL: C71 D85 L22

Strategic Behavior and Social Outcomes in a Bottleneck Queue: Experimental Evidence

Date: 2014-08-13
By: Breinbjerg, Jesper (Department of Business and Economics)
Sebald, Alexander (Department of Economics)
Østerdal, Lars Peter (Department of Business and Economics)
We consider a class of three-player queuing games where players independently choose when to arrive at a bottleneck facility that serves only one at a time. Players are impatient for service but cannot arrive before the facility opens and they dislike time spent in queue. We derive the equilibrium arrivals under the first-in-first-out (FIFO), last-in-first-out (LIFO), and service-in-random-order (SIRO) queue disciplines and compare these equilibrium predictions to outcomes from a laboratory experiment. LIFO provides higher equilibrium welfare than FIFO and SIRO since the players arrive such that lower congestion is induced. Experimental evidence confirms that employing different queue disciplines indeed affects the strategic behavior of players and thereby the level of congestion. The experimental participants do not, however, behave as prescribed by the equilibrium predictions. They obtain significantly higher welfare than prescribed by equilibrium under all queue disciplines. Our results moreover suggest that people perceive LIFO as the most unfair of the three disciplines although the theoretical results suggest that it is welfare optimal.
Keywords: Queue disciplines; congestion; equilibrium; experiments; fairness
JEL: C72 D62 D63 R41

The Market for Paintings in Paris between Rococò and Romanticism

Date: 2014
By: Federico Etro (Department of Economics, University Of Venice Cà Foscari)
Elena Stepanova (Sant’Anna School of Advanced Studies, Pisa)
We analyze organization of auctions and bidding strategies with a unique dataset on Paris auctions between 700s and 800s. Prices reflect the objective features of the paintings and of the sale, and they reveal a substantial death effect, with upward jumps in the years after the death of the artists. Both the hedonic and repeated sale price indexes show a declining pattern for the relative price of paintings starting with the French Revolution. On this basis we analyze the emerging role and market power of art dealers and employ network theory to study whether they created rings to manipulate the outcome of the auctions for their profits. Dealers appear to have been divided into four main communities heavily trading between themselves and we find evidence of collusive behavior with lower hammer prices for buyers belonging to the same community of the dealers organizing the auction.
Keywords: Art market, Hedonic prices, Repeated sales price index, Network theory.
JEL: Z11 N0 D4

Collective choices under ambiguity

Date: 2014-08-19
By: M. Vittoria Levati (University of Verona and Max Planck Institute of Economics, Jena)
Stefan Napel (University of Bayreuth)
Ivan Soraperra (University of Verona)
We investigate experimentally whether collective choice matters for individual attitudes to ambiguity. We consider a two-urn Ellsberg experiment: one urn offers a 45% chance of winning a fixed monetary prize, the other an ambiguous chance. Participants choose either individually or in groups of three. Group decision rules vary. In one treatment the collective choice is taken by majority; in another it is dictated by two group members; in the third it is dictated by a single group member. We observe high proportions of ambiguity averse choices in both individual and collective decision making. Although a majority of participants display consistent ambiguity attitudes across their decisions, collective choice tends to foster ambiguity aversion, especially if the decision rule assigns asymmetric responsibilities to group members. Previous participation in laboratory experiments may miti- gate this.
Keywords: Ambiguity aversion, majority voting, dictatorship

Robust Equilibria in Location Games

Date: 2013-02
By: Berno Buechel (University of Hamburg)
Nils Roehl (University of Paderborn)
In the framework of spatial competition, two or more players strategically choose a location in order to attract consumers. It is assumed standardly that consumers with the same favorite location fully agree on the ranking of all possible locations. To investigate the necessity of this questionable and restrictive assumption, we model heterogeneity in consumers’ distance perceptions by individual edge lengths of a given graph. A profile of location choices is called a “robust equilibrium" if it is a Nash equilibrium in several games which differ only by the consumers’ perceptions of distances. For a finite number of players and any distribution of consumers, we provide a full characterization of all robust equilibria and derive structural conditions for their existence. Furthermore, we discuss whether the classical observations of minimal differentiation and inefficiency are robust phenomena. Thereby, we find strong support for an old conjecture that in equilibrium firms form local clusters.
Keywords: spatial competition, Hotelling-Downs, networks, graphs, Nash equilibrium, median, minimal differentiation
JEL: C72 D49 P16 D43