Market Design: Theory and Practice
Friday, Jan. 6, 2017 3:15 PM – 5:15 PM
- Chair: Kevin M. Murphy, University of Chicago
Existence of Stable Matchings in Large Markets With Complementarities
AbstractIn two-sided matching markets with contracts, the existence of stable outcomes can be guaranteed only under certain restrictions on preferences; the typical restriction is that all agents' preferences are substitutable. We show that, in markets with a continuum of each type of agent, it is only necessary that agents on one side of the market have substitutable preferences to guarantee the existence of a stable outcome. We also consider more general settings with multilateral contracts and no structure on the set of agents, and show that the core is nonempty when there exists a continuum of agents of each type, regardless of agents' preferences. Finally, we show that in settings with bilateral contracts and transferable utility (but an arbitrary contractual network), the existence of competitive equilibria is guaranteed regardless of agents' preferences. We also consider large finite markets, showing that each of the three results above holds approximately in the analogous large finite market.
"Troll" Check? A Proposal for Administrative Review of Patent Litigation
AbstractThe patent system is commonly justified on grounds of promoting social welfare and, more specifically, scientific and technological progress. For years, however, there has been concern that patent litigation in the United States is undermining, rather than furthering, these goals. The time, cost, and complexity of patent suits provide openings for opportunistic assertions of patent infringement that can generate outcomes, possibly through settlement, that represent more a distortion than a fulfillment of patents’ purpose. Such opportunistic assertions can come from any form of patent holder but have been perceived as especially associated with patent-enforcement specialists commonly derided as "patent trolls."
This article proposes a means to address the information problems that facilitate opportunistic assertion—namely, the institution of an automatic process of substantive but non-binding administrative review of new patent-infringement lawsuits. Whether conducted by an independent Patent Litigation Review Board or a division of the U.S. Patent and Trademark Office, such review would (1) help discourage--or bring to an earlier and less costly end--relatively weak patent-infringement lawsuits; (2) strengthen the hands and likely fates of both patentees and accused infringers with especially robust cases; (3) flag weaknesses in litigation positions to the benefit of both private parties and the courts; and (4) provide policymakers with more readily aggregated information that facilitates evaluation of the patent system’s performance. Multiple economic models are used to indicate the likely benefits of such review. Nonetheless, consistent with the notion that an intended benefit of such review is improved information that can shape future policy, the article proposes that the review process be adopted only on a pilot basis, with the review’s status and shape to be reevaluated before the approval of any mandate for its continuance.
- C7 - Game Theory and Bargaining Theory
- D4 - Market Structure, Pricing, and Design