[seriously serious sirius XM radio] IP reform thread

[Whoha]

Patents can become more valuable in time such as drugs that receive approval from the FDA.

I have no problem with that, but it seems that this system that you've described as it is wouldn't change the status quo for really valuable IP that you'd want to be available, only for the less useful ones.

Maybe the article itself has measures to compel or reward inventors and investors for selling patents on the auction, but it seems like they'd just be able to hold out for the price that they could get today(or not sell the patent entirely), the only difference being that if the government buys the patent it would release the patent to public domain.

[KrazyHorse]

I have no problem with that, but it seems that this system that you've described as it is wouldn't change the status quo for really valuable IP that you'd want to be available

Why not?

Maybe the article itself has measures to compel or reward inventors and investors for selling patents on the auction, but it seems like they'd just be able to hold out for the price that they could get today(or not sell the patent entirely), the only difference being that if the government buys the patent it would release the patent to public domain.

????????

Did you read what I wrote about it?

Here's the process:

1) There's a sealed single-bid auction
2) The government offers the patent holder a fixed multiple M (> 1) of the highest bid for the patent. It's a take-it-or-leave-it offer
3) If the holder takes it then, with fixed probability p the gov't keeps the patent and releases it to the public for free, which is precisely what we want (this eliminates the huge losses incurred by a profit-maximizing monopolist). With probability 1-p the gov't assigns the patent to the highest bidder and collects from them the 2nd highest bid

The reason that we have the highest bidder only pay the second highest bid is that in such 2nd price auctions the dominant strategy is for everybody to bid the private value of the thing being bid on (it's the most revealing auction structure). The only reason the gov't doesn't always keep the patent is to keep bidders' incentives aligned with bidding the true value.

[Whoha]

That clears up some misconceptions I had, but is there anything to prevent a patent holder from holding on to their IP if they want to do that for whatever reason?

[notyoueither]

I think the scheme gives the patent holder the right to decline any sale if they are not happy with the bid (I've read the first few pages).

[KrazyHorse]

Whoha:

No, which makes sense. If, for some reason, the originator of the patent has some sort of enormous unique ability to exploit the patent then by forcing them to sell for less than their reserve price we would be reducing the payoff to innovation (which is not what we want).

Because the multiplier M could reasonably be fairly large (since the social gains to research are generally much bigger than the privately appropriable gains under the current patent system as a matter of empirically determined fact) we would expect that most patent holders would take the offer.

[Sava]

You've set the parameters too high for discussion on Poly. May as well just PM DanS back and forth.

exactly... what kind of dumbass expects any kind of intelligent discussion on a gaming forum

or anywhere else on the internet for that matter

[KrazyHorse]

Sava, just because you're an ignoramus doesn't mean that everybody here is. There were two econ PhDs here that I'm aware of, along with a dozen other PhDs in various disciplines and some non-PhD well-informed posters.

[KrazyHorse]

Note: not all the PhDs are well-informed.

[Kuciwalker]

Not sure what the paper proposes on timing. IIRC paper proposes an auction fee to prevent gratuitous auctions.

Do you foresee a problem with giving patent holder freedom on auction timing?

Also, does anybody else have serious proposals for how to do IP reform, or want to add anything else? I don't want this to become just discussion of a single proposal

The government needs to set up some kind of central bureau that all music copyrights go to and everyone can download from. Compensate artists based on # of downloads.

[KrazyHorse]

Kuci, that was Ramo's idea. The problem is that without price discrimination we can't decide what each download is worth...

[KrazyHorse]

To expound further on that point, the auction mechanism does not change the direction of the incentives; without the auction mechanism AND WITH IT the incentives are to create inventions with the maximal appropriable value.

If we do a pay-per-view system (with constant fee rate) then the incentives are altered, however slightly; the incentive is to create whatever works which will garner the most views at a price of 0. This may well not be the same as the works which will garner the most views at the highest price (i.e. maximizing the area of quantity*price). I think that under most reasonable models of the demand curve the latter is a better estimate of the total utility than is the former.

[Kuciwalker]

Kuci, that was Ramo's idea. The problem is that without price discrimination we can't decide what each download is worth...

We decide to fund $X to music as a whole.

[Kuciwalker]

To expound further on that point, the auction mechanism does not change the direction of the incentives; without the auction mechanism AND WITH IT the incentives are to create inventions with the maximal appropriable value.

If we do a pay-per-view system (with constant fee rate) then the incentives are altered, however slightly; the incentive is to create whatever works which will garner the most views at a price of 0. This may well not be the same as the works which will garner the most views at the highest price (i.e. maximizing the area of quantity*price). I think that under most reasonable models of the demand curve the latter is a better estimate of the total utility than is the former.

I only want to apply this to music, where the cost to produce an individual work has a pretty low ceiling compared to many other things.

[KrazyHorse]

We decide to fund $X to music as a whole.

That's not what I meant, son.

I only want to apply this to music, where the cost to produce an individual work has a pretty low ceiling compared to many other things.

WTF does "cost to produce" have to do with discriminating between the value of the produced work?

[Kuciwalker]

That's not what I meant, son.

I know, but it answered a related point.