Events

What is the relationship between science and market structure? We answer this question using the natural experiment of the NDM-1 (New Delhi Metallo-Beta-Lactamase 1) superbug discovery in India reported in August 2010 in Lancet Infectious Diseases. This article shows that NDM-1 superbug was resistant to the broad-spectrum antibiotics carbapenems, widely recognized as a weapon of last resort against infectious bacterial diseases. Using a difference in differences strategy, we find that multinational firms reduced their market share in sales of carbapenems (treated markets) in India compared to narrow-spectrum antibiotics (control markets) immediately after the NDM-1 2010 discovery. We also document a concurrent shift in the prescription behavior of physicians and associated shifts in channel incentives. Our results are robust to pre-trends, alternative controls and account for regional heterogeneity. The results are consistent also with synthetic controls. We are also able to show differential multinational responses given their apriori variation in capabilties from scientific alertness. Our findings have implications for the apriori information revealing role of science for resolving managerial uncertainty within firms and for the ex-post role of social planners in correcting market failures in healthcare. In addition, with the WHO issuing recent warnings around antimicrobial resistance during our current COVID-19 crisis, our results have important current healthcare policy implications. (Joint work with Mayank Aggarwal & Anindya Chakrabarti, IIM Ahmedabad)

Contact person: Rainer Widmann

We present a new platform for large scale networks experiments in continuous time and conduct three experiments on it: groups range from 8 all the way to 100 subjects. These experiments involve pure linking games as well as games with linking and public goods provision.

The major finding is that subjects create sparse networks that are almost always highly efficient. In some cases networks have a very unequal distribution of connections and exhibit small average distances, while in others subjects create equal and dispersed large distance networks. In some cases highly connected nodes earn vastly more while in other cases they earn significantly less than their less connected cohort. Informational overload helps in explaining why highly connected nodes make excessive investments but earn less than the spokes. (Joint work with Syngjoo Choi and Frédéric Moisan)

Contact Person: Michael E. Rose

Virtual Talk (on invitation)

Using a unique dataset that links economics professors with their publications and the citations to those publications, we document a surprising fact: the financial reward (in terms of academic salary) is substantially higher for joint work, rather than being discounted (or prorated). This finding is robust to different specifications, although we find some support for the idea that the coauthorship premium is due to the fact that joint work is better, in the sense that it is more influential. We also examine the publications of these authors. We find strong evidence that coauthored work is more important, even after controlling for author fixed effects and journal fixed effects. Our estimates imply that coauthored publications receive about 75 percent more citations than sole-authored ones, even after accounting for the author and the journal in which it is published.

Contact Person: Michael E. Rose

Virtual Talk (on invitation)

Defying global trends, non-university public research organizations (PROs) continue to be key players in Germanys research landscape. As part of their activities, they provide the work environment for large numbers of Ph.D. students who are then graduated by universities. Similarly, private-sector firms employ substantial numbers of industrial Ph.D. students. Both PROs and the private sector thus help provide human capital for the German system of research and innovation, even though their contribution has been difficult to assess due to limited data availability. In this paper, we employ a unique dataset based on a large-scale record linkage approach to trace how the roles of PROs and firms in doctoral training developed over the past two decades. Our results for about 50,000 STEM Ph.D.s graduated from 1995 to 2013 indicate that across cohorts, increasing shares of STEM Ph.D.s remain employed in academia upon graduation. This trend is accompanied by diminishing shares of Ph.D.s obtaining high incomes, and it is even more pronounced for PhDs who did their dissertation research at PROs. In contrast, we observe a low and over time decreasing probability of industrial PhDs to migrate into academia. Despite reforms aimed at increasing the vertical differentiation of the university sector, our data do not suggest an increasing premium of being trained at top-tier universities. We also study the attainment of leadership and research positions and analyze a subsample of regionally immobile Ph.D.s to explore how strategic location choices relate to the observed patterns.

Contact Person: Michael E. Rose

Virtual Talk (on invitation)

We assess the heterogeneous impact of economic downturns on individuals’ decisions to bring high-technology ideas to the market in the form of new ventures. We thereby examine how worsening labor market conditions influence individuals’ opportunity costs of starting new ventures, the resulting composition of the entrepreneurial pool, and startup performance outcomes. Using a rich dataset of startup founders in the biotechnology and medical device sectors, we find that an increase in the unemployment rate is associated with a substantial rise in the share of entrepreneurs who are most sensitive to worsening labor market conditions. Additionally, we find that startups founded by these entrepreneurs display lower financial and innovative performance than startups founded by entrepreneurs who are relatively insensitive to business cycles. Finally, we provide suggestive evidence that individuals’ heterogeneous response to worsening labor market conditions is a relevant factor in explaining the negative relationship between unemployment and startup performance outcomes. (Joint work with Annamaria Conti, HEC Lausanne)

Contact Person: Felix Pöge

Virtual Talk (on invitation)

Does the added attention associated with scientific prizes have a positive impact on citations to winners’ pre-award articles? The answer has implications for how prizes influence innovation, and whether trade-offs exist when award frequency changes. Using article level citation data associated with matched winner/control paper pairs, we find that the Nobel Prize announcements in economics result in substantial citation benefits for pre-award papers. These benefits are increasing in the distance from the core economics audience. Insiders pay greatest attention to consensus papers cited by the Nobel Prize Committee and written by past Clark Medal winners; outsiders focus more on consensus papers not written by Clark Medal awardees. In both cases, the entry of new citing authors accounts for most of the enhanced attention. We also examine the direct impact of the Clark Medal on citations and find effects comparable to those arising with the Nobel Prize. (Joint work with Zakaria Babutsidze, SKEMA)

Contact Person: Felix Pöge

Virtual Talk (on invitation)

Laws protecting intellectual property rights balance interests of earlier and later rights holders. The tradeoffs are well established for patents. We argue that similar considerations apply to trademarks. Jurisdictions differ in how strongly they protect earlier rights, with EU trademark law protecting the registered use of an earlier right for much longer than US trademark law. Laws in both jurisdictions seek to eventually align registered use of earlier rights with their actual use, creating space on the trademark register for later rights. Data from a recent reform of trademark fees reveal that registered and actual use of EU marks frequently fail to align as intended. We analyse trademark opposition cases at EUIPO to test whether this creates costs for owners of later rights. We find that a subset of firms relies on the protection afforded to earlier rights to permanently expand the breadth of their marks beyond actual use, limiting access to trademarks for later applicants. We discuss policy implications. (Joint work with Stuart J.H. Graham, Georgia Tech, and Amanda Myers, USPTO)

Contact Person: Fabian Gaessler
 

Max Planck Institute for Innovation and Competition, Room E10

Moderation: Aaron Stumpf

Max Planck Institute for Innovation and Competition, Munich, Room 313

We conducted a field experiment to identify the causal effects of extrinsic incentive cues on the sorting and performance of nascent social entrepreneurs. The experiment, carried out with one of the United Kingdom's largest support agencies for social entrepreneurs, encouraged 431 nascent social entrepreneurs to submit a full application for a grant competition that provides cash and in-kind mentorship support through a one-time mailing sent by the agency. The applicants were randomly assigned to one of three groups: one group received a standard mailing that emphasized the intrinsic incentives of the program, or the opportunity to do good (Social treatment), and the other two groups received a mailing that instead emphasized the extrinsic incentives - either the financial rewards (Cash treatment) or the in-kind rewards (Support treatment). Our results show that an emphasis on extrinsic incentives strongly affects who applies for the grant and consequently the type of submissions received. The extrinsic reward cues "crowded out" the more prosocial candidates, leading fewer candidates to apply and fewer applicants targeting disadvantaged groups. Importantly, while the full applications submitted by candidates in the extrinsic incentives groups were more successful in receiving the grant, their social enterprises were less likely to be successful at the end of the one-year grant period. Our results highlight the critical role of intrinsic motives to the selection and performance of social enterprises and suggest that using extrinsic incentives to promote the development of successful social enterprises may backfire in the longer run. (Joint work with Ina Ganguli and Chloé Le Coq)

Contact Person: Dr. Marina Chugunova

Max Planck Institute for Innovation and Competition, Munich, Room 313

Despite increasing gender equality across many domains women remain underrepresented in leading positions. In two experiments, we study whether one reason for this gender gap may be that women are less effective in eliciting coordinated support from followers. Both experiments use coordination games, in which a leader must convince followers to select a particular equilibrium. Our first experiment employs a widely used paradigm to study leader effectiveness, the minimum-effort coordination game, while the second uses a novel game to more directly compare the strength of requests from male versus female leaders. While we find, using explicit and implicit attitude measures, that our participants possess stereotypical associations between gender and leadership, we find no evidence that such bias impacts actual leadership performance. We show that this absence of an effect is surprising, relative to the priors of expert researchers (joint work with Eva Ranehill and Roberto Weber).

Contact Person: Dr. Marina Chugunova