Monetization of Ideas: Estimating Inventors' Gains Under Alternative Patent Enforcement Regimes
This paper analyzes how alternative patent enforcement regimes affect inventors in the market. How does a change in enforcement costs influence the inventors' decision to keep, sell to an intermediary, or enforce their patents through litigation? How much do inventors earn out of patent enforcement and trade under alternative cost structures? I combine publicly available litigation data with data on intermediaries to (i) document the impact of enforcement costs on patent sale prices and incentives, (ii) estimate a dynamic game, (iii) simulate counterfactual outcomes under different patent enforcement systems to quantify benefits on inventors. Reduced form analysis of the data shows that small firms operating in high-risk litigation sectors are more likely to sell their patents after an exogenous increase in enforcement costs. Moreover, such an increase in enforcement costs decreases the price that inventors receive from the patent sale. Empirical facts suggest that changes in enforcement costs have a significant impact on the income that inventors generate out of their assets. In order to capture the impact of alternative regimes on inventors, I develop and estimate a dynamic game played between an inventor, an intermediary and a licensee building on Abrams, Akcigit, Oz (2017). In the model, inventors have the option to keep, litigate or sell their assets to an intermediary. The patent value follows a Markov distribution á la Pakes (1986). An intermediary negotiates a price with inventors and chases licensees, picks the optimal time to enforce, and makes a take-it-or-leave-it offer to the licensee. The key point of this model is the difference between enforcement technologies of inventors and intermediaries in generating returns from enforcement. Intermediaries can enforce patents at a lower cost and share the surplus with inventors. The quantitative experiments suggest that in equilibrium, the average litigation fees paid increases by 7.46 (no-intermediary world), 2.5 (British Rule), and 3.5 (intermediary-pays-all rule) percent. Additionally, the average earnings of inventors decrease by 15.23 (no-intermediary world), 2 (British Rule), 2.5 (intermediary-pays-all rule) percent. The findings of this paper can help to inform future policy change on patent enforcement.
The Patent Troll: Benign Middleman or Stick-up Artist? (joint with David S. Abrams and Ufuk Akcigit)
How do Non-Practicing Entities (NPEs) impact innovation and technological progress? The question has enormous importance to industrial policy, with little direct evidence to inform it. This paper provides new evidence on the subject, both theoretically and empirically. In doing so we inform the debate that has portrayed NPEs alternatively as benign middlemen that help to reallocate IP to where it is most productive or stick-up artists that exploit the patent system to extract rents, thereby hurting innovation. We make use of unprecedented access to NPE-derived patent and financial data as well as a novel model that guides our data analysis. We find that NPEs target patents coming from small firms and those that are more litigation-prone, as well as ones that are not core to a company's business. When NPEs license patents, those that generate higher fees are closer to the licensee's business and more likely to be litigated. We also find that downstream innovation drops in fields where patents have been acquired by an NPE. This evidence provides some support for both views of NPEs and suggests that a more nuanced perspective on NPEs as well as additional empirical work is necessary before informed policy decisions can be made.
The Democratization of Canvas: The Impact of Paris Art Salon on the Selection of Talent between 1831-1850 (joint with Murat Alp Celik and Pau Pereira Battle)
How do authoritarian institutions impact the selection of talent and novel ideas? To answer this question, we analyze the impact of Paris Fine Art Salon on the selection of young, talented artists and novel ideas before and after its democratization during 1831-1850. We assemble a historical dataset on characteristics of painters and paintings submitted to Paris Fine Art Salon, and the jury decisions for our analysis. We find evidence that new entrants, female artists, young artists, unconventional ideas had more presence after the democratization of the Salon jury. Using regression discontinuity design, we compare the long-run market performance of the artists on the margin.
The Impact of Droit de Suite on Art Markets
Droit de suite is a right granted to artists or their heirs to receive a fee on the resale of their works of art. What is the impact of droit de suite on art markets? Proponents of droit de suite claim that resale right benefits small artists by providing them the opportunity to reap the benefits of their work in later stages. Opponents argue that it would only help famous artists to obtain considerable profits. Opponents also claim that auction houses may stop investing in young, promising artists due to a potential decrease in profit margins. In this paper, I compile and analyze historical auction house data located in major European Cities before and after 1920, the first appearance of the rule in France, to inform the debate.
Fall 2013, Introduction to Microeconomics, T.A. for Prof. Rebecca Stein
Spring 2014, Introduction to Macroeconomics, T.A. for Prof. Luca Bossi
Fall 2014, Industrial Organization, T.A. for Prof. Uriel Spiegel
Spring 2015, International Trade, T.A. for Prof. Iourii Manovski
Fall 2015, Intermediate Macroeconomics, T.A. for Prof. Guido Menzio
Spring 2016, Law and Economics, T.A. for Prof. Camilo Garcia Jimeno
Fall 2016, Urban Fiscal Policy, T.A. for Prof. Holger Sieg
Fall 2016, Empirical Industrial Organization, T.A. for Prof. Aviv Nevo
Fall 2017, Introduction to Micro and Macro Economics and its Applications, T.A. for Prof. Gizem Saka
Industrial Organization, Innovation, Law and Economics
University of Pennsylvania
McNeil Building - Room 438
3718 Locust Walk
Philadelphia, PA 19104
Professor Holger Sieg
Deparment of Economics,
University of Pennsylvania,
3718 Locust Walk, 459 McNeil Bldg.
Philadelphia, PA, 19104
Professor Ufuk Akcigit
Department of Economics
University of Chicago
5757 South University Ave
Saieh Hall, Office: 403, Chicago,IL
Professor David S. Abrams
University of Pennsylvania, Law School,
3501 Sansom Street Philadelphia, PA 19104