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III. PRIVATE INDUSTRY PROXY SIGNALS This part applies the new proxy signal framework to the problem of identifying the optimal level of patent protection for society. The discussion will provide [...]

INTRODUCTION I. INNOVATION AND INTELLECTUAL PROPERTY LAW A. The Relationship between Patent Law and Innovation B. Conventional Approaches to Optimizing Patent Rights II. PROXY SIGNALS: CAPTURING PRIVATE INFORMATION FOR PUBLIC [...], This Article presents an original empirical methodology to identify which patent laws will best promote optimal incentives to innovate for society. Vociferous debates over patent reform pit the United States' largest innovation industries against each other in a dispute concerning whether stronger or weaker patent rights are necessary to promote innovation. Past efforts to answer this question have been thwarted by an inability to parse the impossibly complex social and legal relationship between innovation and patent law. Rather than considering such problems directly, the proxy technique introduced here offers a new framework to leverage indirect signals that capture better information than previously available concerning how best to promote incentives to innovate. In certain contexts, it is possible to use empirical information about the trade-off between the incentives and exclusivity costs of patent law to identify particular private industries that (1) face trade-offs equivalent to those that society faces, and (2) possess far superior information concerning how best to balance such trade-offs. Where industries satisfy both criteria, their private preferences will happen to align with social innovation objectives and can be mined for previously untapped, socially beneficial information. The proxy signal approach provides a new public choice methodology, designed to leverage the strength of collective private industry and market knowledge, in a manner that can be applied to other legal domains beyond patent law.

Any strategy-proof social choice function that chooses Pareto optimal outcomes can't assure all a consumption bundle bounded away from the origin for exchange economics with classical economic preferences. There is a fundamental conflict between efficiency and distributional goals in exchange economics if the social choice rule needs to be strategy-proof.

Social choice and the discounted utility model are discussed.

Partially degenerate nested logit (NL) models have broad applicability in regional science. However, the literature on them is relatively sparse and confusion exists on some aspects of identification and related matters. This paper addresses a number of conceptual and econometric aspects of partially degenerate NL models. These include identification, scaling, invariance, and consistency with the utility-maximizing postulate that underlies discrete choice analysis. This is accomplished within the larger, encompassing framework of nondegenerate NL models of which the partially degenerate model is a special case.

With urban planning policy in transition in many parts of the world, the need to understand the theoretical bases for planning and to ground discussion about policy innovations on theory is as important as ever. This essay reviews the relevance of three economic paradigms to the theory of development control. It is written as a technical review with the purpose of explaining, contrasting and contextualising the contributions of these paradigms. Much has been written about the Pigouvian case for regulative planning. The Coasian literature is strong especially in the US but is not so well known elsewhere; and little has been written that draws together the diverse perspectives offered by the public choice school. This essay has been written particularly for academic planners and urban social scientists in the UK, and in other European and Commonwealth countries who are not familiar with the technical arguments underlying the Coase vs Pigou zoning debate. It is also an essay on the public choice theory of planning since it contextualises Coasian planning theory within that wider critique of welfare economics. Among other points, it argues that the relevance of Coasian planning theory is not by any means restricted to US-style zoning, nor is it purely a debate about deregulation. Coasian and other public choice perspectives generate a rich source of theoretical and empirical propositions which should be tested and developed, particularly as frameworks for comparative analysis of planning constitutions and policies. In this spirit, the essay concludes with elements of a research agenda., 1. Introduction Planning constitutions and policies are under pressure to change in most countries around the globe. In the US, there is a widespread experimentation with more flexible development control [...]

An analysis of social choice functions approximated by equilibrium outcomes reveals that virtual Bayesian implementation necessitates incentive compatibility. The study also reveals that incentive compatibility is also sufficient for Bayesian incentive consistency and an example shows iteratively undominated strategies where Bayesian implementable social choice functions that are not implementable.

A proposed method for determining social outcomes that avoids the impossibility problem of Arrow (1951) is described defines social rankings that are a good fit to individual preferences. The agreement functions defining 'good fit' might be an individual property because preferences are such a property. Conversely, the agreement functions might be defined by a decision-maker or judge who make social choices or moral judgments, thereby offering internal structure to the process referred to as a social welfare function by Arrow.

In this article, recent attempts to apply prospect theory to the study of international relations are reviewed and evaluated. The review of this literature leads to a number of theoretical and methodological critiques that are highlighted by an experiment that demonstrates the difficulties inherent in attempting to transport this theory across disciplinary boundaries. Of special importance is the introduction of verbal probability expressions into the experimental design. The results of the experiment provide some support for prospect theory, but differences in the results obtained for different verbal probability sets indicate that decision theorists need to be more concerned with the manner in which probabilistic information is conveyed to (and discussed by) decision makers.

In recent years, economists have sought to extend the logic of marginal analysis to topics not traditionally considered within the domain of the discipline. Among the areas to which this [...]

The implementation of social choice functions is studied under the conditions when the planner randomizes and imposes arbitrary fines on players. Any social choice function can be implemented in iteratively weakly dominated strategies with 3 or more players in complete information environments. The mechanisms constructed are finite and robust to the order of removal of dominated strategies.

This study examines a problem of systematic measurement error in the National Election Studies (NES). A significant number of respondents overstate their support for the winning candidates. This bias for the winner in vote reports has been a problem at some time for the four offices examined in this analysis: modest overall for the presidency, serious throughout for senator and governor, and serious in House elections only since 1978, when the NES changed the form of the vote choice question. Variations in the winner bias are documented for conditions of question wording changes, voter validation, and incumbency. The effects of interview timing are also shown to be significant in some cases but to vary by office. The problem of biased vote reports has a serious distorting effect when estimating a large class of vote choice models in subpresidential elections. The study concludes with a brief discussion of some of the options available for dealing with the problem.

Models of political behavior which assume rational calculation on the part of voters and other political actors have proven powerful, yet they are still resisted by those who misunderstand the basic premise of rational choice models. Such models assume the actor will attempt to optimize expected benefits, which may not be actual benefits due to miscalculations arising from insufficient or wrong information. The rational choice model subsumes the concerns of its foes. John H. Aldrich convincingly argues that the decision to vote entails both low costs and low benefits. Also, by paying attention to politicians' influence on voter turnout, he restores politics to the equation.

Turning out to vote is the most common and important act of political participation in any democracy. Voting is also less well understood and explained empirically than other political acts engaged in regularly by citizens. Turnout, however, presents a special problem for rational choice theories of politics, for it is taken to be the paradigmatic example of the problem of collective action, in which, although all may benefit from voting, it is rarely in the individual's self-interest to vote. This paper begins by examining the problem of explaining turnout. A basic form of rational choice models of turnout is developed - basic in the sense that it is common to all such models. This basic model is shown to be incomplete, and the two most important models, the calculus of voting and the minimax regret model, are illustrated as alternative ways to complete this basic model, along with mention of game-theoretic models. Their strengths and weaknesses are then assessed. The remainder of the paper argues that rational choice accounts of turnout are possible. The first step is to argue that turnout is not an especially problematic version of the collective action problem because it is, for many, a low cost, low (expected) benefit decision. A 'strategic politicians' account of turnout and campaigns is examined next. A reinterpretation of the intrinsic benefits of voting is then considered and is used to examine the most important substantive problem in the turnout literature, its decline. These steps, I argue, make theories of ordinary political decisions at once both more political and more integrated into the politics of the larger system.

Research in the field of political cognition has proceeded at a rapid pace, offering numerous new perspectives regarding the dynamics of mass political behavior. However, the primary focus of most such research has been the individual actor. For example, the political relevance of heuristic principles of judgment has been addressed in a variety of recent studies, all of which examine individual-level data. However, though it is certainly true that psychological processes operate on the individual, it is also quite clear that the political significance of mass behavior typically is found at the collective level. Thus, it is essential that researchers specify the aggregate consequences of those psychological processes that operate on the political judgments of the individual citizen. In this article, a unique aggregate-level data set is introduced to aid in examination of the broad significance of heuristic processing of source cues. The analysis reveals clear evidence that this individual-level cognitive efficiency mechanism exerts influence on the shape and character of mass opinion.

D. Abreu and H. Matsushima's 1992 paper on the implementation of social choice functions in strategies that are iteratively undominated is criticized. The mechanisms used generate games wherein the iterative removal of strategies that are strongly dominated is subject to dispute. Analysis of examples of two-player coordination games with varying assumptions indicates that while Abreu and Matsushima's non-fine mechnism applies to a number of social-choice functions, it is based on a game in which the desired result is produced regardless of the existence of a countervailing focal point.

J. Glazer and R.W. Rosenthal state that the mechnisms used to implement social-choice functions in iteratively undominated strategies lead to controversial games with iterative removal of strategies that are strictly dominated. However, iterative logic is accepted in conventional decision theory. Common knowledge of rationality, paradoxes of which are cited as criticisms, is necessary in the logic of iterative dominance, but the mechanisms in question are simultaneous and thus preclude the rationalization of iteratively dominated behavior.

This paper deals with the problem of ranking several alternatives on the basis of a valued preference relation. A system of three independent axioms is shown to characterize a ranking method based on |net flows' which contains as particular cases the rules of Copeland and Borda and is used one of the PROMETHEE methods, The problem of comparing and ranking a number of alternatives based on a valued preference relation is tackled. Three independent axioms are used to characterize the ranking method based on net flows. The rules of Copeland and Borda are incorporated in the model. The net flow method is also used in the multiple criteria decision making process.

The overlapping generations model for infinite horizon intergenerational social choice settings is proven oligarchical on the conditions of strict nonimposition, Arrow's independence axiom and the generation of continuous and transitive strict social preference relations. The oligarchy is finite and preference relations of some members maybe inverted prior to incorporation into the group preference scheme. Application of the overlapping generations exchange economy in the definition of outcomes yields the same conclusions, while the unrestricted domain case yields stronger results.

This paper shows that a choice function is either consistent with the expected utility hypothesis or is ex ante dominated for some prior. Journal of Economic Literature Classification Numbers: D81, D11, C72, G11.

The practical necessity of estimating preferences between subsets of an n-item set from preferences between the items themselves has long been recognized. This paper explores a new basis for extension that can be expressed almost as simply as an ordering of items but contains a great deal more information. The new basis, called a self-reflecting signed order, interweaves preferences for the inclusion of items in a subset and preferences for exclusion of items from the subset. Properties of self-reflecting signed orders and defensible conditions for their extension to subset preferences are studied. Journal of Economic Literature Classification Numbers: 022, 920.

Hurwicz's theorem states that Pareto optimality, individual rationality, and incentive compatiblity are inconsistent in a class of private goods economies. A similar result is obtained by Ledyard and Roberts in a class of public good economies. Hurwicz and Walker show that generically there are no incentive compatible and Pareto optimal mechanisms in a class of both private and public goods economies. Without imposing Pareto optimality, this paper explores the possibility of the existence of incentive compatible and autarkically individually rational mechanisms in a class of public good economies. Autarkic individual rationality, which strengthens individual rationality in a natural way, and incentive compatiblity are shown to be inconsistent. Journal of Economic Literature Classification Numbers: 022, 024,025.

Reformulate the classical implementation problem a la Maskin (1977) as follows. Think of a social choice correspondence as a mapping from preference profiles to lotteries appendover some finite set of alternatives. Say that a social choice function f is virtually implementable in Nash equilibrium if for all [episilon] > 0 there exists a game form G such that for all preference profiles [theta], G has a unique equilibrium outcome x([theta]), and x([theta]) is [epsilon]-close to f([theta]). (This definition may be directly extended to social choice correspondences.) Then (under mild domain restrictions) the following result is true: In societies with at least three individuals all social choice correspondences are virtually implementable in Nash equilibrium. This proposition should be contrasted with Maskin's (1977) classic characterization, according to which the nontrivial requirement of monotonicity is a necessary condition for exact implementation in Nash equilibrium. The two-person case needs to be considered separately. We provide a complete characterization of virtually implementable two-person social choice functions. While not all two-person social choice functions are virtually implementable, our necessary and sufficient condition is simple. This contrasts with the rather complex necessary and sufficient conditions for exact implementation. We show how our results can be extended to implementation in strict Nash equilibrium and coalition-proof Nash equilibrium, to social choice correspondences which map from cardinal preference profiles to lotteries, and to environments with a continuum of pure alternatives.

Two conceptual models for social motives that were suggested by the results of Liebrand, Jansen, Rijken, and Suhre (1986) were examined. A goal model suggests that social motive differences reflect differences in interpersonal relations such that cooperators strive for good or moral interpersonal relations, whereas individualists strive for favorable power relationships. A schema model suggests that social motive differences reflect differences in cognitive knowledge structures. Prescriptive message content and partner strategy were manipulated to test these models. The goal model predicted that the prescriptive message would affect behavior most when it was congruent with the S's own goals. The schema model predicted that a message consistent with S's schema would prime related elements of that schema and amplify the usual response to one's partner's strategy. The results generally supported the schema model for cooperators; neither model was supported for individualists.

In this paper we relax the unrestricted domain condition of Arrow's Impossibility Theorem to allow the consideration of domains of econimic preferences--i.e., continuous monotonic preferences on some positive orthant [R.sup.M.sub.+]. The impossibility result remains in effect after all but the most drastic reductions in the size of the domain, in the sense that any domain admitting an Arrow SWF must be nowhere dense in the usual topology on the set of admissible preference profiles.

In this paper we develop a mathematical model of social choice that provides the basis for a computer simulation of a political decisionmaking process. Prior research has demonstrated the nonexistence of an equilibrium for multidimensional voting games, a result that is obtained both globally and locally. Our simulation, while successfully modeling these results, provides a capability for analyzing the systemic effects (voting cycle characteristics) of iterated voting games that has not before been available to researchers. The structure of our computer model also anticipates development of dynamic models of social choice and provides a basic framework for eventual stability analyses of decisionmaking behavior in simulated and actual political environments.

The author examines a rare occurrence in the US Supreme Court's practice, when judges switch votes to avoid the court coming to an opposite holding but which is inconsistent with their own logic, using a social choice model.

There has been a great deal of research in recent years investigating the question of whether or not there exist institutions (game forms) for which the set of equilibria will coincide with the set of Walrasian equilibria. In this paper we show the existence of a game form that is feasible, both for equilibrium and disequilibrium strategies, continuous, and for which the set of Nash equilibria coincides with the set of (constrained) Walrasian equilibria for all pure exchange economies. The game form allows agents to behave strategically both with respect to their preferences and their initial endowments.