Events

We conduct a welfare analysis of R&D subsidies and tax credits incorporating externalities, limited R&D participation and financial market imperfections, estimating the model using Finnish R&D project level data. Firms with no immediate R&D history face more severe financial market imperfections than firms with a history of R&D. The intensive, not the extensive margin of R&D is important for policy. Financial market imperfections play no role in determining R&D. Tax credits and subsidies increase R&D investments compared to laissez-faire but less than first best. Neither R&D support policy improves welfare. (Joint work with Tuomas Takalo, Bank of Finland, and Tanja Tanayama, EIB) 

Contact: Rainer Widmann

We wrote the attached draft article, Valuing the Vaccine, in the context of debates over whether contracts to COVID-19 vaccine manufacturers for less than $40 per course were overcompensating those producers. In short, we argue that the right lodestar for valuing medical innovations is social value—not compensating R&D costs—and that even with low-end estimates of social value, current prices reward developers with a small fraction of those estimates.

During the talk, I will also explain our plans to extend this argument in a broader paper, tentatively titled Valuing Medical Innovation. Although cost-based pricing has attracted significant attention from scholars concerned with U.S. pharmaceutical pricing, our arguments for value-based pricing are not limited to the COVID-19 vaccine context. In some cases, such as drugs without rigorous evidence of comparative clinical efficacy, value-based pricing suggests that current rewards are too high. In other cases, such as for preventative medicines and treatments that require lengthy clinical trials, evidence suggests that current rewards are too low. 

Contact Person: Lucy Xiaolu Wang

We investigate whether excessively optimistic beliefs play a role in the persistent demand for doctoral and postdoctoral training in science. We elicit the beliefs and career preferences of doctoral students through a novel survey and randomize the provision of structured information on the true state of the academic market and information through role models on nonacademic careers. One year later, both treatments lead students to update their beliefs about the academic market and impact career preferences. However, we do not find an effect on actual career outcomes two years postintervention.

Link to paper: https://research.upjohn.org/up_workingpapers/334/

Contact: Fabian Gaessler

How do children influence productivity, promotions, and participation in science? We investigate this question by analyzing biographies, patents, and publications for 82,094 American scientists in 1956, at the height of the baby boom. Output data indicate that mothers reach peak productivity in their mid 40s, nearly a decade after other scientists. Event studies of marriage show that mothers become more productive 15 years into marriage, when children are less work. Differences in the timing of productivity have important implications for tenure. Just 27% of academic mothers achieve tenure, compared with 48% of fathers and 46% of other women. Examining selection, we find that female scientists are more educated, half as likely to marry, one third as likely to have children, and half as likely to survive in science compared with men. While mothers who survive are positively selected, employment data indicate that a generation of baby boom mothers was lost to American science. (Joint work with Scott Kim)

Contact Person: Felix Pöge

Markush structures are molecular skeletons that contain not only specific atoms but also include one or several placeholders each representing a broad set of chemical (sub)structures. They are used by pharmaceutical companies to claim a large class of compounds without the necessity of writing out every fully defined single chemical entity in a patent application. (For instance, the Markush structures claimed within patent EP 0810 209 contain a total of 10^16 different compounds resulting from all possible permutations within the Markush structures.) After summarizing the ongoing policy debate regarding the use of Markush structures in patents, this paper provides first quantitative evidence regarding the use Markush structures in the pharmaceutical industry and their effects on important outcomes in the patent prosecution process.

Contact: Marina Chugunova

Abstract

In the current data access and sharing debate, data interoperability is widely proclaimed as being key for efficiently reaping the economic welfare-enhancing effects of further data re-use. Although we agree, we argue for a more holistic view on the notion of data interoperability. Neither law nor economics or technology have assessed the notion of data interoperability coherently and cannot do so straightforwardly.  There is no common understanding of the term interoperability. From a technical perspective, there are different enablers of interoperability, and interoperability counts with different degrees. From an innovation policy and innovation economics perspective, it is also not clear how to strike the right balance between excludability enabled by a lack of interoperability and the need of making data or systems (inter)-operable with each other and what role the legislature should play. Furthermore, merely outlining interoperability as an abstract legal obligation may lack normative strength. Antitrust remedies, data governance provisions, or data access rights need to reflect on the different technical concepts of interoperability and should also interpret the provision in light of the legislative rationale. This leads us back to traditional normative economic regulation theory and the question of when exactly and how data interoperability - also as a precondition to data quality – should be tackled by the legislature and how it can be effectively enforced. To this end, subjecting dominant online platform companies to additional interoperability obligations and stricter monitoring can be an effective approach to control the abuse of market power and is currently embedded or foreseen in the most recent Digital Laws in Germany and Europe  (10th Amendment of the German Antitrust Code (GWB)/ Digital Markets Act).  Moreover, under the Second Payments Services Directive (PSD2) certain innovative payment service providers may now claim real-time access via APIs to certain account information that must be interoperable in order to immediately initiate payments and foster e-commerce. However, such privilege may also create certain tensions with existent IP and Trade Secrets Laws. It should also be borne in mind the costs coming from data access regimes aiming for a cross-sectoral (horizontal) data interoperability, that is, addressing the „balkanization“ of data in specific sectors.

This lecture portrays the current policy debate pertaining to data access and interoperability while it provides a multidisciplinary analysis on the various aspects of the interoperability conundrum. It will also present some ideas as to how technical determination by law could gain normative strength.

SSRN publication

Speaker Info

Dr. Begoña Gonzalez Otero

Jörg Hoffmann

Other topic-related publications by the speakers

• Hoffmann, Jörg, Vásquez Duque, Omar, Can data exploitation be properly addressed by competition law? A note of caution, (2021) Concurrences N°1-2021, pp. 75-82.
•  Hoffmann, Jörg, Safeguarding Innovation through Data Governance Regulation: The Case of Digital Payment Services (May 18, 2020). Max Planck Institute for Innovation & Competition Research Paper No. 20-08
•  Gonzalez Otero, Begoña, Compelling to Disclose Software Interoperable Information: A Risk for Innovation or a Balanced Solution? (January 2013). The Journal of World Intellectual Property, Volume 16, Issue 1-2 (May 2013)

In this paper, we argue that economic societies, established during the eighteenth-century, contributed to industrialization through the diffusion of new ideas generated during the Scientific Revolution in Europe. Local societies functioned as catalyst for the translation of scientific knowledge into useful knowledge and the diffusion to interested parties. We test this hypothesis by combining information on more than 3,300 society members from the membership lists of all active economic societies in the German lands with several measures of innovation and upper-tail human capital. We find a robust positive relationship between the local member density and the number of valuable patents, exhibitors at world fairs, and highly-skilled mechanical workers. We further show that grid-cell pairs with members from the same society show a higher technological similarity. We interpret this as evidence that economic societies generated information networks which fostered spatial knowledge diffusion and shaped the geography of innovation.

Contact: David Heller

Mit dem Programm „Europäische Digitale Souveränität“ will die Bundesagentur für Sprunginnovationen (SPRIND) richtungweisende Impulse für den Aufbau eines europäischen Open-Source-Ökosystems setzen. Rafael Laguna stellt die relevanten Technologiebereiche der Zukunft vor, in die Europa jetzt investieren muss, um langfristig die digitale Unabhängigkeit Europas zu sichern.

Moderation: Dietmar Harhoff

Die Veranstaltung wird online via Zoom durchgeführt. 

The Digitality Fireside Chat is an informal event format for in-depth talks and discussions on digitality and digital transformation. The aim is to allow for an exchange between researchers and digital pioneers who have come forward with new concepts, proposals and ideas, and are actively shaping digitalization.

How much lower are the career earnings of workers who face large declines in demand for their occupations, compared to similar workers who do not? To answer this question we combine forecasts on occupational employment changes, measures of realized occupational decline and technological replacement, and administrative panel data on the population of Swedish workers, with a highly disaggregated initial occupational classification.  We find that compared to similar workers, those facing occupational decline lost about 2-5 percent of mean cumulative earnings from 1986-2013, with workers at the bottom of their occupation’s initial earnings distribution suffering substantially larger losses.  These earnings losses are partly accounted for by reduced employment and increased time spent in unemployment and retraining.

Contact Person: Michael E. Rose

With Dr. Richard Weber (Managing Director), BurdaForward ‒ digital media house of the future

The Max Planck Digitality Fireside Chat is an informal event format for in-depth talks and discussions on digitality and digital transformation. The aim is to allow for an exchange between researchers and digital pioneers who have come forward with new concepts, proposals and ideas, and are actively shaping digitalization.