Patents, Privacy, and Hospital Premiums at this Weekend’s International Industrial Organization Conference

By TAP Staff Blogger

Posted on April 23, 2015


This weekend, economists from around the world will gather for the 13th Annual International Industrial Organization Conference. Hosted by the Industrial Organization Society (IOS), the three days of sessions will cover topics ranging from patent behavior and patent policy, the impact of technology adoption, media and social networks, e-commerce and digital economics, the competitive effects of regulation, telecommunications markets, and the economics of online privacy.

TAP scholars Jay Pil Choi and James Rebitzer are participating in this renowned economics conference. Professor Choi will participate in three sessions where he will discuss patent trolls, patent enforcement, and patent pools. Professor Rebitzer will discuss the effect of adverse selection on hospital premium competition. Additionally, the Microsoft Corporation, which supports this TAP website, is sponsoring a session on the economics of online privacy.

Professor Jay Pil Choi will present his paper, “A Model of Patent Trolls.” Co-authored with Heiko Gerlach, this paper develops a model to understand various litigation strategies employed by non-practicing entities (NPEs). The authors show that when an NPE faces multiple potential infringers who use related technologies, it can gain credible threat to litigate even when it has no such credibility vis-a-vis any single potential infringer in isolation.

During the patent policy sessions, Professor Choi will discuss Jorge Lemus and Emil Temnyalov’s paper, “Outsourcing Patent Enforcement: The Effect of "Patent Privateers" on Litigation and R&D Investments.” Additionally, Professor Choi will examine the influence of patent pools on the incentive to file patents from Justus Baron and Tim Pohlmann’s paper, “The Effect of Patent Pools on Patenting and Innovation - Evidence from Contemporary Technology Standards.”

Jay Pil Choi is the University Distinguished Professor at Michigan State University. His areas of expertise include intellectual property rights, economics of network effects, and antitrust economics. He is on the editorial board of the Information Economics and Policy, International Telecommunications Policy Review, and Journal of the Korean Econometric Society.

Professor James Rebitzer will explore insurer competition on premiums and hospital coverage, specifically the effect of adverse selection, from Mark Shepard’s paper, “Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange.” This paper concludes that adverse selection will encourage plans to limit networks and prestigious academic hospitals to lower prices.

James B. Rebitzer is Professor of Management, Economics and Public Policy at Boston University’s School of Management, and the Chair of the Markets, Public Policy and Law Department. He is also a Professor of Economics (by courtesy) in the College of Arts and Sciences Economics Department. Professor Rebitzer’s research and teaching focuses on organizational economics with a special emphasis on behavioral issues in the economics of human resource systems. Much of his recent research concerns the effect that fragmented delivery and insurance systems have on the cost and quality of health care.

A final session to highlight is the Economics of Online Privacy, which is sponsored by the Microsoft Corporation. Papers in this session explore the following:

  • The Economics of the Right to be Forgotten, by Byung-Cheol Kim and Jin Yeub Kim, examines the conflict between the privacy right and other fundamental rights such as the freedom of speech, expression, and access to information. The "right to be forgotten" involves the right for individuals to ask for 'inadequate, irrelevant or no longer relevant, or excessive' information about them to be dropped from Internet searches.
  • Money and Privacy - Android Market Evidence, by Michael Kummer and Patrick Schulte, studies the role of privacy in the market for mobile applications. The authors found that consumers take it into account when applications request rights to collect private information, and suppliers ask for more rights if they offer an app for free than if they offer it for a fee.
  • False Advertising and Consumer Protection Policy, by Andrew Rhodes and Chris Wilson, analyzes the effects of consumer protection policy on false advertising. The authors show how false advertising can arise in equilibrium and how it can influence rational consumers. Additionally, the paper provides conditions under which weak, rather than strong, regulation can be optimal for consumers and society due to the positive effects of false advertising in counteracting firms' market power.
  • Susceptibility and Influence in Social Media Word-of-Mouth, by Jörg Claussen, Benjamin Engelstätter, and Michael Ward, seeks to identify which factors generate larger or smaller word-of-mouth (WOM) effects. The authors found that users with the most influence on others tend to be better gamers, have larger social networks, but spend less time playing. Interestingly, these are also the users who are least susceptible to WOM effects.

The Industrial Organization Society (IOS) was founded in 1972 by Stanley Boyle, working closely with Willard Mueller. The original aim of the IOS was to promote research on antitrust policy, regulatory policy, and competition and market power in real-world markets. Since 2003, the IOS has sponsored an annual International Industrial Organization Conference in order to accommodate the needs and interests of the burgeoning field.