| 1. |
- Gangopadhyay, Shubhashis, et al.
(författare)
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Collusive Bidding, Competition Law, and Welfare
- 2023
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Ingår i: Review of Law and Economics. - 1555-5879. ; 19:2, s. 213-231
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Tidskriftsartikel (refereegranskat)abstract
- We explain why competing firms form collective entities to buy patents from other entities, particularly from non-practicing entities (NPEs), and follow a catch and release patent strategy. We show why having competitors bid as a single unit is better than having competitors bid against each other. More important, we show that collusive bidding on patents held by NPEs, even when the patents are not essential for a standard (SEPs), may increase consumer surplus, particularly when technological innovation is drastic, and improve social welfare. This provides a theoretical foundation that explains why competition authorities often allow collusive bidding for patents and why courts employ the "rule of reason"to analyze agreements under competition law. We also show that a cartel of incumbents will always outbid a potential entrant, or a patent assertion entity, over a technology that can destroy the value of the incumbents' existing assets.
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| 2. |
- Lindblom, Ted, 1956, et al.
(författare)
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A Theoretical Analysis of Collusion Involving Technology Licensing Under Diseconomies of Scale
- 2024
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Ingår i: The B.E. Journal of Theoretical Economics. - 1935-1704. ; 24:1, s. 263-297
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Tidskriftsartikel (refereegranskat)abstract
- This study focuses on firms with cost-efficient technology that use licensing to influence product market behaviour, market prices and outputs and the resulting welfare effects. We show how licensing fees can be constructed that lead to identical collective industry outputs as under collusion while industry output is equal to or higher than that achieved under competition and sustained in equilibrium. Hence, consumers are either indifferent to firms’ collusion or better off when they do collude, whereas firms (producers) are always better off due to the improved cost efficiency of integrating the new production technology. This provides a theoretical foundation that explains why technology licensing is observed in highly concentrated industries characterised by significant diseconomies of scale relative to demand. We contribute to the literature by demonstrating how technology licensing involving collusion can reduce the dissipation effect and improve social welfare in oligopolistic industries. An important policy implication is that collusion involving technology licensing should not always be challenged by antitrust authorities, particularly when it does not transfer welfare from consumers to producers.
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| 3. |
- Lindblom, Ted, 1956, et al.
(författare)
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Collusion and Licensing in Oligopolies with Linear Marginal Operating Costs
- 2019
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Ingår i: Paper presented at Wolpertinger 2019 meeting in Venice Italy, August 28-31, 2019.
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- Oligopolistic competition is a quite common phenomenon in many industries, not least in the aviation, banking and telecom industries. In these industries, just a few firms are often dominant on the domestic markets as well as on the international arena. Not seldom, we can observe coordinated behavior between some or several of the firms in the form of, for example, alliances and/or cartels. Coordinated behavior can improve cost efficiency, prevent entry and create market power. For the firms coordinated behavior may be attractive if it increases their profit, while from the perspective of consumers collusion is of course undesirable when hampering competition. However, this is not necessarily the case. In this paper, we model and analyze coordinated behavior of competing firms in a Cournot setting. In standard models, it is assumed that firms have constant marginal operating costs and no fixed costs. We show that collusion might be beneficial from a societal standpoint when firms that operate under imperfect competition have linear marginal operating costs and fixed entry costs. Under certain conditions, coordinated firm behavior under Cournot oligopoly leads to higher industry profit and consumer welfare than uncoordinated behavior. Moreover, marginal operating costs that are sufficiently increasing in output enhance the incentives of firms to engage in technology transfer through licensing. Licensing might in some cases serve as an enforcing mechanism of coordinated behavior among innovating firms and increase the attractiveness of cartels
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| 4. |
- Lindblom, Ted, 1956, et al.
(författare)
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Modelling banks’ lending and deposits using the aggregate equilibrium approach
- 2023
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Ingår i: 2023 Wolpertinger Annual Conference, August 31th - September 3rd, Finland, University of Vaasa.
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- We use the aggregate equilibrium approach (AEA) framework to demonstrate how different degrees of bank competition on lending and deposits markets affect market efficiency, bank profitability, and social welfare. We explain why an interbank market among banks with different costs for producing loans and deposits improves the efficiency of financial intermediation. Banks with imbalances in their loans could benefit by borrowing from banks with surplus of deposits. In the presence of an interbank market for lending and deposits, we show that banks’ aggregate profits increase without affecting the surplus of banks’ customers.
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| 5. |
- Lindblom, Ted, 1956, et al.
(författare)
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Technology Transfers, Efficiency Gains and Surplus Thresholds:An Aggregate Equilibrium Approach Analysis
- 2023
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Ingår i: World Finance Conference, Norway August 2nd-4th 2023, University of Agder.
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Konferensbidrag (refereegranskat)abstract
- We illustrate how an aggregate equilibrium approach can be applied to analyze the efficiency gains and social welfare effects of transfers of sufficiently large, but nondrastic, technological innovations among firms in an industry characterized by diseconomies of scale. In particular, we demonstrate how the approach can be used to identify a range of intermediate cost differences between firms where technology transfer through collusion will be optimal for competing firms and the society, including thresholds for when consumers will be indifferent to whether firms in an industry compete or collude. In addition, we discuss how a per-unit royalty license fee, which is partly paid upfront for a minimum required quantity, can be used by the licensor to restrict the quantity output of the licensee(s), and ensure the stability of collusion. We suggest that this licensing contract, which has implications for policymakers and practitioners, may explain why technology transfers often occur in highly technological industries among otherwise competing firms with market power.
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| 6. |
- Mallios, Aineas, 1988, et al.
(författare)
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Do ESG funds engage in portfolio pumping to gain higher flows? An application of Benford's Law
- 2024
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Ingår i: International Journal of Finance and Economics. - 1076-9307 .- 1099-1158.
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Tidskriftsartikel (refereegranskat)abstract
- Portfolio pumping is identified as an ‘illegal’ trading practice that involves inflating quarter- and year-end portfolio returns. Utilizing U.S. domestic equity mutual fund daily return data, we examine whether environmental, social, and governance (ESG) funds engage in portfolio pumping to generate higher flows. Our findings reveal that, on average, ESG funds attract 0.4% higher flows than other funds. However, they engage in portfolio pumping and achieve returns that are 5.3 basis points (bps) higher at quarter ends compared to their returns during the rest of the year. This practice does not result in additional fund flows. Notably, compared to other funds, ESG funds exhibit a significant 4bps reduction through portfolio pumping. This implies that, on the last day of the quarter, ESG funds earn approximately 4bps lower returns compared to other funds. Portfolio pumping is costly for both investors and financial markets since it leads to trading activities that cause stock prices to deviate from their fundamental values. ESG funds engage less in portfolio pumping than other funds, which indicates that their primary focus is to maximize fund flows rather than enhance or create a positive social impact on the underlying firm portfolio. Investors seem to understand this goal, particularly when ESG funds engage in portfolio pumping and avoid investing in ESG funds.
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| 7. |
- Mallios, Aineas, 1988
(författare)
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Licensing Games
- 2018
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- Patents are legal instruments that protect ideas, and the rise of a knowledge-based society was inevitably accompanied with their increased economic importance. As a result of this growth, patented technology became an indispensable element of firms, governments, and modern economies. Nevertheless, patents preserve their economic value only if they can be enforced in court, which is, in fact, a trait common to various instruments designed to protect intellectual property. However, contract enforcement is often imperfect. Therefore, the protection offered by patents is not absolute, raising a number of implications for their use. This thesis studies the use of intellectual property rights, with a focus on technology transfer through licensing. In particular, it examines the choice of a licensing mode by a patent owner when the protected technology can be transferred and imitated. Additional emphasis is put on the impact of patenting and secrecy on the strategic behaviour of innovating firms, specifically on the incentives to license and imitate. It also analyses the litigation of patented technology that is prone to imitation when the legal protection is imperfect. The main results derived from the analysis can be summarised as follows. First, the analysis shows that the licensing mode of intellectual property is a strategic choice primarily driven by the relative magnitudes of the per-unit production costs, the magnitude of innovation - the reduction in the per-unit cost because of the new technology - and the imitation cost. Particularly, licensing by way of a per-unit royalty might be preferable to licensing by way of a fixed fee from the viewpoint of a patent owner, while fixed-fee licensing might be at least as good as royalty licensing for consumers. Additionally, licensing might be used to prevent imitation, but might not be used to strategically select competition before patent expiry. Second, the analysis finds that the availability of a choice of protection affects the strategic behaviour of innovating firms and the type of inventions licensed in the industry. Patenting might be more or less preferable than secrecy from the viewpoint of a technology owner, depending on the efficiency of the imitation technology and the strength of intellectual property protection. Furthermore, highly inefficient imitation technologies might render licensing preferable to imitation, while highly efficient imitation technologies might lead to more imitation than licensing. Acknowledging that a trade secret might leak to the public and also considering that the probability of leakage might increase with the number of firms practising the secret, the analysis suggests an increase in the attractiveness of patent protection. Third, the analysis also finds that licensing, imitating, and litigating over a patented technology is dependent on the magnitude of innovation, the efficacy of imitation, and the strength of the judicial system: the degree to which increased litigation spending can influence the outcome of the court. When litigants expect to settle the dispute out of court, a sufficiently small magnitude of innovation might lead to licensing before imitation (an ex-ante licence), while a sufficiently large magnitude of innovation might lead to licensing after imitation (an ex-post licence). In addition, a patent owner benefits by taking no action against a highly imperfect imitation.
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| 8. |
- Mallios, Aineas, 1988
(författare)
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Manipulation in reported dividends: Empirical evidence from US banks
- 2023
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Ingår i: Economics Bulletin. - 1545-2921. ; 43:1, s. 441-461
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Tidskriftsartikel (refereegranskat)abstract
- Based on a sample of US banks, and adopting Benford’s law, regarding the distribution of digits of random numbers, I analyse reported dividends per share (DPS). I find uncommon patterns of significant digits of reported DPS that depart from the expected frequency based on Benford’s law. I argue that the data may have been transformed to conceal the real financial conditions of the sample institutions. I show that the observed distribution of digits in the second place of DPS deviates significantly from Benford’s law, especially for banks with high stock price volatility. I also find that banks report DPS with frequencies of second-place digits that deviate significantly from Benford’s expected frequencies, regardless of whether they are large or small, and listed or not. Finally, I find no evidence that banks undertake less manipulation in the fourth quarter, which is audited, than in the previous three quarters. Misreporting dividends to conceal or improve true financial performance affects the decisionmaking of investors and financial analysts.
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| 9. |
- Mallios, Aineas, 1988, et al.
(författare)
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The Relation Between Patent Pledgeability and Credit Rationing
- 2023
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Ingår i: Carbó-Valverde, S., Cuadros-Solas, P.J. (eds) New Challenges for the Banking Industry - Searching for Balance Between Corporate Governance, Sustainability and Innovation. - : Palgrave Macmillan Cham. - 2523-336X .- 2523-3378. - 9783031329302
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Bokkapitel (refereegranskat)abstract
- We analyze the economic issue raised when financial intermediaries refuse to supply credit to a borrower even at a higher rate than that posted by lenders. We suggest that patent-backed loans can be used as a contracting device to reduce credit rationing in loan markets characterized by imperfect information. Patents have become among the most valuable assets of firms in high-technology industries. They determine the production of goods and contain information about the firms’ credit quality. Patents can also be used by banks to screen borrowers. We provide a theoretical foundation showing that patents used as collateral may reduce the level of information asymmetry in loan markets and facilitate also bank lending. Using a setup of financial intermediation with capital constrained entities and imperfect information, we suggest that patent pledging can be used to minimize credit rationing. This may lead to more investment in innovation and more growth
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