Events

Max Planck Institute, Munich, Room 313

There is a longstanding debate about whether technological innovation enables the rise of new entrants, or reinforces incumbent advantages. The ongoing digital transformation of medicine represents a unique opportunity to revisit this debate in the context of health care, an industry that now represents nearly 18% of the U.S. economy. In 2016, over 700 medical devices containing software were cleared for marketing by the FDA, almost double the number approved a decade earlier. What types of firms are most likely to lead digital innovation in health care? And do traditional factors such as geographic specialization, experience, and firm revenues predict this type of innovation? We use unstructured text data on new medical devices, recovered through automated scraping, to study digital innovation in this industry. Using supervised document classification and other natural language processing tools, we analyze the content of over 33,000 devices over the years 2002-2016. We first document the growth of software and networking capabilities and find significant heterogeneities across medical specialty areas. We then use detailed firm data to understand the characteristics of the firms bringing digital technologies to market and find strong evidence for the importance of firm experience with software products. VC funding and location in a cluster are predictors of follow-on digital innovation, but not novel innovation, while public firms are more likely to engage in first-time product digitizations. We find several pieces of evidence that support within-firm positive spillovers from software inclusion in one product to another, consistent with a low marginal cost of doing so.

Contact person: Dr. Fabian Gaessler

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

We document the causal effect of simple bonus incentives on performance in a non-routine, cognitively demanding, interactive team task. These tasks are more and more important in the economy and at the same time understudied. We conduct a field experiment and show a causal positive effect of incentives on the completion probability and the overall completion time of the task. Using several experimental treatment variations we shed light on the importance of different bonus components. We study the framing of bonuses (as gains or losses) and investigate whether bonus incentives work due to i)the monetary reward or ii) the reference performance bonus incentives provide. We also investigate the robustness of the effect in an additional sample and study the reactions to bonus incentives by differently composed teams. Finally, we shed light on how bonus incentives affect teams' willingness to explore in the non-routine task. (joint with F. Englmaier, S. Grimm and D. Schindler)

Contact person: Dr. Marco Kleine

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

This paper estimates the effect of trade policy during the Great Liberalization of the 1990s on innovation in nearly 100 countries using international firm-level patent data. The empirical strategy exploits ex-ante differences in firms’ exposure to countries and industries, allowing us to construct firm-specific measures of tariff cuts. This provides a novel source of variation that enables us to establish the causal impact of trade policy on innovation. Our results suggest that trade liberalization has economically significant effects on innovation and, ultimately, technical change and growth. According to our estimates, a substantial share of global knowledge creation during the 1990s can be explained by trade policy reforms. Furthermore, we find that the increase in patenting reflects innovation, rather than simply more protection of existing knowledge. Both improved market access and more import competition contribute to the positive innovation response to trade liberalization (joint work with Andreas Moxnes and Karen Helene Ulltveit-Moe).

Contact person: Laura Rosendahl Huber, Ph.D.

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

US doctrine on international trademark disputes is founded on a precedent from 1952. Steele v. Bulova Watch Co. is the first and only Supreme Court decision on the question of how far US trademark law should be extended beyond the US’s national borders when an international infringement is at issue. Even though cases have drastically multiplied there has been no comprehensive account of the actual state of the law. Courts and commentators continue to rely on a small set of leading cases, Steele and a few appellate court decisions, neglecting the landscape of lower courts’ decision-making. An empirical study of the field’s complete case law from 1952 until 2016 helps to address this blind spot. The results show that much of the conventional wisdom is questionable, if not incorrect. The analysis not only provides new and unexpected insights into the actual extension of US trademark law but also explains which factors drive the outcome in practice, how these factors interact with one another, and how each factor has been micro-shaped over time. Based on these findings, several crucial corrections to existing doctrine can be suggested. Most succinctly put, one can say that, in the interest of aligning judicial practice with the realities of socioeconomic globalization, the current overextension of the Lanham Act must be curbed. The doctrine of trademark extraterritoriality that has evolved in the wake of Steele v. Bulova is an anticompetitive detriment rather than a right-owner panacea.

Contact person: Dr. Fabian Gaessler

Max Planck Institute for Innovation and Competition, Munich, Room E10

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

We study the impact of a new nationally advertised six-month intensive training program to encourage leadership in social entrepreneurship among youth. Program costs were on the order of 12,000 euros per participant. We conduct a randomized field experiment where 50 applicants were randomly allocated to the program and 50 similar applicants were rejected. Despite large training efforts we find no robust treatment effects on leadership motivation, leadership style, social entrepreneurial aspirations and intentions, skills, sustainable behaviour, entrepreneurial actions and venture progression. Those that had made more progress on their venture prior to the start of the program were more likely to make progress afterwards, irrespective of treatment. There were also large Hawthorne effects. Those having the highest expectations before selection to treatment, as measured by their self-ratings on a battery of scores, experienced the biggest drop across all scores after selection, irrespective of treatment. Training people to become entrepreneurs seems to be difficult and costly (co-authored with Florian Hoos).

Contact Person: Dr. Fabian Gaessler

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

How is law structured? How does it change over time? These questions lie at the heart of legal scholarship, but they are mostly answered in narratives. Network science opens an alternative avenue, leveraging concepts from graph theory to quantify, visualize, and model legal structures and legal change. This talk draws on an original dataset of Federal Constitutional Court (Bundesverfassungsgericht) decisions to illustrate how the network science perspective can enhance our understanding of German constitutional jurisprudence and to carve out more generally the promises and perils of measuring the law.

Contact person: Dr. Fabian Gaessler

Max Planck Institute for Innovation and Competition, Munich, Room E10

Max Planck Institute for Innovation and Competition, Munich, Room E10

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

The increasing ability to organize information and transmit it to the market is ushering in an era where economic actors are highly responsive to the market. These shifts are particularly pronounced in the emerging technology space of the Internet of Things. Central to these disruptive innovations is a change in business operations, which has altered the architecture and conceptualization in how interactions occur; a transformation, which the patent system has not necessarily caught up with yet. Against this background this study investigates what patent governance regimes are needed in a European Union context so to assure that the Internet of Things enables the success of Small- and Medium Sized Enterprises (SMEs). It does so, by means of a survey among SMEs active in the IOT space. In light of the evidence gathered, the study then identifies key components of 'good governance' for patent law and provide recommendations for policy makers that will allow to set the baseline for an 'Internet of Things for All.'

Contact person: Dr. Fabian Gaessler