Power, Patents And Peer-Review: Essays In Applied Microeconomic Theory

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My dissertation is a collection of four essays in applied microeconomic theory. The first chapter develops a theory of female labor supply in a general equilibrium framework where decisions are taken by the households and the power distribution among the members is determined endogenously. It is shown that female labor supply can take different shapes due to the structural differences between economies, and multiple equilibria might occur in the labor market. Policy implications of tax-benefits, subsidies for labor-saving household durables, and reservation for women at employment are worked out. The results found here resonate well with previous empirical findings and suggest additional testable implications. In the next chapter, Talia Bar and I study and criticize the current patent system in the United States, particularly, prior art search and its disclosure policy. To determine patentability, inventions are evaluated in light of existing prior art. Innovators have a duty to disclose any prior art that they are aware of, but have no obligation to search. We identify conditions in which innovators have no incentive to search. Search intensity increases with R&D cost, the examination intensity, and patenting fees. In the later half of the chapter, we study determinants of patent quality and the volume of patent applications. We model a policy reform proposal to establish a two-tiered patent system. Introducing a second patent-tier can reduce patent applications and the incidence of bad patents. We claim that innovators with high ex-ante probability of validity will more likely apply to the more valuable patent-tier, but sorting in the dimension of economic significance is not obvious. The last chapter provides a theoretical model for analyzing the behavior of peer-reviewed journals. It finds that, apart from natural human errors, inefficiencies arise purely for reasons of inter-journal strategic behavior. Specifically, as a result of competition, journals tend to set their quality cut-off points excessively low.
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