Abstract

Researchers have frequently used publicly available data on product ranks to estimate nonpublic sales quantities, believing that there is a linear relationship between logged rank and logged sales values due to the assumption that sales follow a power law. However, using data on book sales, which are commonly thought to follow a power law, we find that the (double logged) relationship between ranking and sales is not linear, but actually concave. We demonstrate that this concavity is likely to cause poor predictions of sales in many instances. We also explore the use of nonlinear specifications as an alternative method to predict sales from ranks and find a simple specification that ameliorates many of these poor sales estimates. We illustrate some of the problems of applying a linear technique to this nonlinear relationship by examining the claim that the greater product variety made available to shoppers on the Internet has a large positive impact on social welfare, and also a claim about sales levels in top 20 and top 50 “charts.”

One major way by which the Singapore Economic Development Board (EDB) seeks to attract foreign investors is the Pioneer Certificate Incentive. This exempts businesses that introduce substantially more advanced technology, skillsets, or know-how from corporate tax or taxes them at a concessionary rate of 5 or 10 per cent for five years. The Pioneer rate is a large discount relative to the normal corporate tax rate of 17 per cent.

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Importance  Many physicians believe that most medical malpractice claims are random events. This study assessed the association of prior paid claims (including a single prior claim) with future paid claims; whether public disclosure of prior paid claims affects future paid claims; and whether the association of prior and future paid claims decayed over time.

Objective  To examine the association of 1 or more prior paid medical malpractice claims with future paid claims.

Design, Setting, and Participants  This study assessed the association between prior paid claims (including a single prior claim) with future claims; whether public disclosure of prior claims affects future paid claims; and whether the association of prior and future paid claims decayed over time. This retrospective case-control study included all 881,876 licensed physicians in the US. All data analysis took place between July, 2018 and January, 2023.

Exposure  Paid medical malpractice claims.

Main Outcome and Measures  Association between a prior paid medical malpractice claim and likelihood of a paid claim in a future period, compared with simulated results expected if paid claims are random events. Using the same outcomes, we also assessed whether public disclosure of paid claims affects future paid claim rates.

Results  This study included all 881,876 physicians licensed to practice in the US at the time of the study. Overall, 3.3% of the 841,?961 physicians with 0 paid claims in the prior period had 1 or more claims in the future period vs 12.4% of the 34?,512 physicians with 1 paid claim in the prior period; 22.4% of the 4,189 physicians with 2 paid claims in the prior period; and 37% of the 1,214 physicians with 3 paid claims in the prior period. The association between prior claims and future claims was similar for high-medical-malpractice-risk and lower-risk specialties; 1 prior-period claim was associated with a 3.1 times higher likelihood of a future-period claim for high-risk specialties (95% CI, 2.8-3.4) vs a 4.2 times higher likelihood for lower-risk specialties (95% CI, 3.8-4.6). The predictive power of a prior paid claim for future claims declined gradually as the time since the prior claim increased, for prior or future periods up to 10 years. Public disclosure did not affect the association between prior and future paid claims.

Conclusions and Relevance  In this study of paid medical malpractice claims for all US physicians, a single prior paid claim was associated with substantial, long-lived higher future claim risk, independent of whether a physician was practicing in a high- or low-risk specialty, or whether a state publicly disclosed paid claims. Timely, noncoercive intervention, including education, has the potential to reduce future claims.

ICLE Senior Scholar Daniel Gilman served as a panelist at the Committee for Justice’s Dec. 15, 2022 event on antitrust, Congress, and the Federal Trade Commission (FTC), alongside Alden Abbott of the Mercatus Center, Jessica Melugin of the Competitive Enterprise Institute, and Robert Wagener of U.S. Rep. Scott Fitzgerald’s office. The full video is embedded below.

Abstract

This paper examines a simple and old question: should innovators receive a patent or a prize? The answer I provide is equally simple: they should receive both. The literature on patents versus prizes has proceeded mostly under the assumption that there should be a choice between a regime of patents and a regime of prizes in which patents fall into the public domain upon award of the prize. There are significant “public choice costs” under the prize plans. By this I mean there are risks of inappropriate transfers to patentees – that is, looting – and of confiscation of patentees, through the conduct of or through the omissions of government agents. The innovation regime I propose is a patent-plus-prize scheme. The patentee would receive the patent and a prize that approximates consumer surplus. Public choice costs are considerably lower than under prize schemes: there would be no looting and no risk of confiscation under patent-plus-prize. In addition, private and social incentives to innovate are aligned.

Comment on Mastercard Incorporated; Matter No. 201 0011

Commissioners,

I am an expert on the law & economics of payment cards and have written extensively the subject.[1] I am submitting this comment on behalf of the International Center for Law & Economics (ICLE) because we have concerns regarding the effects that the consent order may have on the functioning of and innovation in payment systems.

Among there are that the agreement will undermine the security of payments made using single-message systems; set a precedent that, if applied more broadly, would undermine the security of payments more generally; and discourage investment in innovation, especially in the development of new, secure, tokenized payment systems that have the potential to reduce fraud, theft, and other forms of counterparty risk. Such an outcome would be, in our view, entirely detrimental to the future of the U.S. payment system.

To elaborate those concerns, we attach a paper we recently produced that discusses the regulation of single-message payment systems and, in particular, the regulation of routing on such networks. We hope this work will help to inform your deliberations on the matter.

[1] See, e.g., Julian Morris & Todd J. Zywicki, Regulating Routing in Payment Networks, International Center for Law & Economics (Aug. 18, 2022), https://laweconcenter.org/resources/regulating-routing-in-payment-networks; Julian Morris, Central Banks and Real-Time Payments: Lessons From Brazil’s Pix, International Center for Law & Economics (Jun. 1, 2022), https://laweconcenter.org/resources/central-banks-and-real-time-payments-lessons-from-brazils-pix; Julian Morris, Regulating Payment-Card Fees: International Best Practices And Lessons For Costa Rica, International Center for Law & Economics (May 25, 2022), https://laweconcenter.org/resources/regulating-payment-card-fees-international-best-practices-and-lessons-for-costa-rica; Todd J. Zywicki, Julian Morris, & Geoffrey A. Manne, The Effects Of Price Controls On Payment-Card Interchange Fees: A Review And Update, International Center for Law & Economics (Mar. 4, 2022), https://laweconcenter.org/resources/the-effects-of-price-controls-on-payment-card-interchange-fees-a-review-and-update.

Abstract

Although most studies of major communications reform legislation focus on the merits of their substantive provisions, analyzing the political dynamics behind the legislation can yield important insights. An examination of the tradeoffs that led the major industry segments to support the Telecommunications Act of 1996 (the “1996 Act”) provides a useful illustration of a political bargain. Analyzing the current context identifies seven components that could form the basis for the next communications statute: (1) universal service; (2) pole attachments; (3) privacy; (4) intermediary immunity; (5) net neutrality; (6) spectrum policy; and (7) antitrust reform. Assessing where industry interests overlap and diverge and the ways that the political environment can hinder passing reform legislation provides insights into how these components might combine to support the enactment of the next Telecommunications Act of 1996.

Abstract

Congressional leaders, policy activists, and scholars contend that patents are a principal cause of rising drug prices. They argue that a solution exists in two federal statutes that allegedly authorize agencies to impose price controls on drug patents: 28 U.S.C. § 1498 and the Bayh-Dole Act. These “price-control theories of § 1498 and the Bayh-Dole Act” maintain that Congress has already endorsed the unprecedented and controversial policy of breaking patents to lower drug prices in private transactions in the healthcare market.

Neither § 1498 nor the Bayh-Dole Act authorize agencies to impose price controls, as confirmed by their plain text and by their interpretation by courts and agencies. Section 1498 is an eminent domain statute that applies only when a patent is used by and for the government, such for the military, the Post Office, or the Veterans Administration. The Bayh-Dole Act promotes commercialization of patented inventions derived from federal funding of upstream research; consistent with this commercialization function, this law specifies four delimited conditions when a federal agency may “march in” and license a patent when a patented product is not sold or available in the marketplace. Applying canons of statutory interpretation, the meaning of these two statutes is clear. Neither specifies that “price” triggers regulatory controls over private market transactions. Congress knows how to enact price-control laws, such as the Emergency Price Control Act of 1942 or when it specifies “reasonable price” as a goal of legislation. The price-control theories of § 1498 and the Bayh-Dole Act profess unprecedented agency powers lacking any authorization in existing statutes. Yet academic scholarship, as well as policy and legal work based on this scholarship, continue to promote the price-control theories of § 1498 and the Bayh-Dole Act. These are policy arguments masquerading as statutory construction.

ICLE Chief Economist Brian Albrecht joined the Cato Daily Podcast to discuss non?compete agreements in labor markets: why they exist, how they work, and the Federal Trade Commission’s proposal to ban them. The full episode is embedded below.