Taking Account

BEA Participates in Panel This paper develops a tech-engineering, and production de-on Semiconductors nique that can be used to appor­ cisions. The paper estimates the At the Allied Social Sciences As­ tion improvements in an index underlying demand and (1) sociation meeting in January, of quality-adjusted price be-quantitatively compares Intel's BEA Chief Economist Ana tween changes in nominal prices policy with the socially optimal Aizcorbe arranged a panel on and quality improvements in the policy and (2) estimates the wel­ semiconductors, chaired by high-tech product. Detailed data fare consequences of changes in Samuel Kortum (University of on prices and physical, electrical, Intel's decisions caused by Chicago). packaging, and architectural fea­ shocks to demand and by an in­ tures of Intel desktop PC proces­ vestment subsidy. How Licensing Resolves sors is used to estimate hedonic Holdup: Evidence From a Durable Goods Oligopoly price indexes and to construct a Dynamic Panel Data Model with Innovation: Theory quality-adjusted price index. with Unobserved and Empirics The index shows that a slow-Heterogeneity Ronald Goettler (Carnegie Mel-down in the rate of decline of lon) and Brett Gordon (Colum-Ralph Siebert (Purdue Univer­ quality-adjusted prices for Intel bia). Discussant: Ana Aizcorbe. sity) and Georg von Graevenitz microprocessors occurred dur-This paper proposes a model (University of Munich). Discus­ ing and after 2003. Potential of dynamic oligopoly and ap­ sant: Carol Robbins (BEA). contributions of manufacturing plies it to the microprocessor in-This paper examines whether technology gains, architectural dustry. Our findings highlight licensing is an appropriate in-innovation, and software im­ the " competing-with-itself " as­ strument to cut through a patent provement are also analyzed; pect of being a monopolist of a thicket. In the semiconductor implications for R&D invest-durable good: the monopolist industry, new technologies ment strategies in computing must innovate to stimulate de-might be thwarted by firms technology are summarized. mand through upgrades. The holding blocking patents. In the Microprocessors: The benefit is higher for the monop­ model, high expected blocking Economics of New Process olist because its substantial pric­ leads to ex ante licensing, while Technology ing power enables it to extract ex post licensing arises if ex-Unnikrishnan Sadasivan Pillai much of the innovation-gener­ pected blocking is low but real­ (University of Minnesota). Dis­ ated surplus. We also show that ized blocking is high. Also, ex cussant: Daniel Sichel (Federal prices and profits are much ante licensing reduces firms' re-Reserve Board). higher when firms correctly ac­ search …