R E S E A R C H




Work in progress

Pay-for-Delay with Settlement Externalities

Emil Palikot  and  Matias Pietola

April, 2016


Abstract

Motivated by recent antitrust cases in the pharmaceutical industry, this paper studies the interplay between pay-for-delay settlements, licensing deals and litigation. Our analysis highlights externalities that they generate: pay-for-delay settlements reduce competition, which encourages entry; whereas, licensing and litigation make entering less profitable. Faced with multiple entrants, the incumbent exploits these externalities by offering licensing deals to some entrants or pursuing litigation, in order to decrease the cost of delaying contracts offered to others. The number of delayed entrants increases with patent strength. Entrants without pay-for-delay settlements pursue litigation for patents of intermediate strength, otherwise, receive licensing deals.

 

Policy piece

Pay-for-Delay, Licensing and Litigation

Emil Palikot and Matias Pietola

April, 2019

 


 

Work in progress

Decentralized Pricing

Matias Pietola

April, 2018

 

Abstract

This paper studies the conditions under which an intermediary can decentralize pricing decisions to privately informed parties of a transaction. Assuming first one-dimensional signals and negatively interdependent values, the paper shows that decentralized pricing is both necessary and sufficient for weak ex post implementation. Without negative interdependency, this result fails. Furthermore, considering arbitrary signal spaces, the paper shows a similar result for strong ex post implementation, provided that the values satisfy a separability assumption.

 




Work in progress

Inverse Pricing in Two-Sided Markets

Matias Pietola

November, 2016


Abstract

This article derives a robust pricing mechanism for two-sided markets, when users on each side privately know their network benefits. The mechanism is optimal in the class of Bayesian incentive compatible and interim individually rational mechanisms, allowing the platform to do better than with posted prices (Rochet and Tirole, 2003). The mechanism is robust in the sense of dominant strategy incentive compatibility and ex post individual rationality.




Matias Pietola

matiaspietola(at)gmail.com