IDEI Toulouse Conference on the Economics of the Software and Internet Industries 2007: I General Notes

For those interested, there is a second, related, post about the conference’s roundtable on internet search.

Friday Plenary 1

Two empirical papers. Both reasonable but neither fascinating. Second about network effects in the adoption of electronic medical record (EMR) technology using state-varying privacy laws as a form of instrument. Privacy laws do inhibit adoption of EMR systems because of inhibition of network effects (you aren’t going to be able to transfer).

Saturday Plenary 1

Lerner: Trolls on State Street (quality of business method patents). This was an interesting paper on which I ended up being the discussant (I’ve posted my discussant presentation). Stand-out figure is that business method patents are litigated 27 times more than the average and over an order of magnitude more than the next most litigated category (drugs).

Noel and Schankerman: strategic patenting, R&D and market value in the (large) software industry. An impressively ambitious paper. Overall affect of patenting on R&D is positive with ‘incentive’ effect outweighing the ‘thicket’ affect. Of course their dataset if based on very large software firms — precisely those who have tended to favour software patents so far so difficult to know what this means for policy.

Saturday Plenary 2

Excellent presentation by Ross Anderson of his summary paper on economics and information security. Some doubts about the details of Ross’ claims (real-life seems much messier than the simple economic models suggest, e.g. p2p, drm …). Jacques Cremer made some good comments along these lines and also posed (and half-answered) the question as to why so few economists seem to get into this area (main point: doing decent theoretical work here is hard — or at least work that would get published).

Second item on dynamic durable good models with quality improvements was a little hard going at least as a presentation (theory presentations are always harder).

Saturday Parallel Session

Pornography, Rape and the Internet (Todd Kendall). Nice empirical paper not related to anything I do but an interesting general result. Rather than summarize here’s the abstract:

The arrival of the internet caused a large decline in both the pecuniary and non-pecuniary costs of accessing pornography. Using state-level panel data from 1998-2003. I find that the arrival of the internet was associated with a reduction in rape incidence. However, growth in Internet usage had no apparent effect of other crimes. Moreover, when I disaggregate the rape data by offender age, I find that the effect of the internet on rape is concentrated among those for whom the internet-induced fall in the non-pecuniary price of pornography was largest — men ages 15-19, who typically live with their parents. These results, which suggest that pornography and rape are substitutes, are in contrast with most previous literature. However, earlier population-level studies do not control adequately for omitted variables, including the age-distribution of the population, and most laboratory studies simply to not allow for potential substitutability between pornography and rape.

Take away: an increase in internet access of 10% is associated with a 7.3% decline in the incidence of (reported) rape (p.23).

There are, of course, some questions. Paper is proxying pornography by internet access but internet access is also associated with easier access to all kinds of other forms of material (shopping, games, general information etc) – material, furthermore, that is perhaps easier to access than pornography. The author tries to control for this by looking at other crime types (and finds no association — except in the case of prostitution) but this does not help as much since other crime types may not have such general substitution effects (murder, for example, is notoriously stable over time while robbery may be driven primarily by other — monetary — factors).