Search Results
Journal Article
The software patent experiment.
Over the past two decades, the scope of technologies that can be patented has been expanded to include many items previously thought unsuitable for patenting, for example, computer software. Today, the U.S. Patent and Trademark Office grants 20,000 or more software patents a year. Conventional wisdom holds that extending patent protection to computer programs will stimulate research and development and, thus, increase the rate of innovation. In "The Software Patent Experiment," Bob Hunt and Jim Bessen investigate whether this has, in fact, happened. They describe the spectacular growth in ...
Working Paper
The economics of debt collection: enforcement of consumer credit contracts
In the U.S., third-party debt collection agencies employ more than 140,000 people and recover more than $50 billion each year, mostly from consumers. Informational, legal, and other factors suggest that original creditors should have an advantage in collecting debts owed to them. Then, why does the debt collection industry exist and why is it so large? Explanations based on economies of scale or specialization cannot address many of the observed stylized facts. The authors develop an application of common agency theory that better explains those facts. The model explains how reliance on an ...
Journal Article
Patent reform: a mixed blessing for the U.S. economy?
The 1980s represented a period of dramatic change in the design and enforcement of U.S. intellectual property law. Many of these changes were adopted in the hopes of stimulating private research and development and improving the technological competitiveness of American industries. This article examines the effects of an especially important aspect of these changes: many more inventions qualify for patent protection than before. While it seems logical that making patents easier to obtain will encourage more inventive activity, economic analysis reveals this is not always true, and it is less ...
Working Paper
Urban density and the rate of invention
Economists, beginning with Alfred Marshall, have studied the significance of cities in the production and exploitation of information externalities that, today, we call knowledge spillovers. This paper presents robust evidence of those effects. We show that patent intensity?the per capita invention rate?is positively related to the density of employment in the highly urbanized portion of MAs. All else equal, a city with twice the employment density (jobs per square mile) of another city will exhibit a patent intensity (patents per capita) that is 20 percent higher. Patent intensity is ...
Working Paper
The agglomeration of R&D labs
This paper has been superseded by WP 15-03. The authors study the location and productivity of more than 1,000 research and development (R&D) labs located in the Northeast corridor of the U.S. Using a variety of spatial econometric techniques, they find that these labs are substantially more concentrated in space than the underlying distribution of manufacturing activity. Ripley's K-function tests over a variety of spatial scales reveal that the strongest evidence of concentration occurs at two discrete distances: one at about one-quarter of a mile and another at about 40 miles. These ...
Journal Article
What's in the file? The economics and law of consumer credit bureaus.
In "What's in the File? The Economics and Law of Consumer Credit Bureaus," author Bob Hunt points out that lenders in the United States have voluntarily shared information about their customers - through credit bureaus - for nearly a century. Hunt explains how sharing information about consumers' indebtedness and payment histories can benefit both consumers and lenders. These benefits depend, however, on the accuracy of the information reported and the care taken to ensure that information is disclosed only when appropriate. Hunt also describes the Fair Credit Reporting Act, which ...
Working Paper
An empirical look at software patents
U.S. legal changes have made it easier to obtain patents on inventions that use software. Software patents have grown rapidly and now comprise 15 percent of all patents. They are acquired primarily by large manufacturing firms in industries known for strategic patenting; only 5 percent belong to software publishers. The very large increase in software patent propensity over time is not adequately explained by changes in R&D investments, employment of computer programmers, or productivity growth. The residual increase in patent propensity is consistent with a sizeable rise in the cost ...
Journal Article
Antitrust issues in payment card networks: can they do that? should we let them?
Although people still use cash to pay for goods and services, the trend is toward payment cards. In the U.S., payment card networks coordinate the activities of thousands of financial institutions, millions of retail locations, and several hundred million consumers. This coordination may include the collective setting of certain prices and other controversial network rules. Such practices have recently come under the scrutiny of antitrust authorities in the U.S. and abroad. In "Antitrust Issues in Payment Card Networks: Can They Do That? Should We Let Them?" Bob Hunt describes the ...
Working Paper
Business method patents and U.S. financial services
A decade after the State Street decision, more than 1,000 business method patents are granted each year. Yet only one in ten are obtained by a financial institution. Most business method patents are also software patents. ; Have these patents increased innovation in financial services? To address this question the author constructs new indicators of R&D intensity based on the occupational composition of financial industries. The financial sector appears more research intensive than official statistics would suggest but less than the private economy taken as a whole. There is considerable ...
Working Paper
The agglomeration of R&D labs
This paper has been superseded by WP 15-03. We study the location of more than 1,000 research and development (R&D) labs located in the Northeast corridor of the U.S. Using a variety of spatial econometric techniques, we find that these labs are substantially more concentrated in space than the underlying distribution of manufacturing activity. Ripley?s K-function tests over a variety of spatial scales reveal that the strongest evidence of concentration occurs at two discrete distances: one at about one-quarter of a mile and another at about 40 miles. We also find that R&D labs in some ...