Research @ BaylorBusiness -- Hankamer School of Business
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Browsing Research @ BaylorBusiness -- Hankamer School of Business by Author "Grinols, Earl L., 1951-"
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Item Existence of Equilibriuim in Welfare-enhancing Free Trade Areas(2005-08-13T17:05:39Z) Grinols, Earl L., 1951-; Silva, Peri A.Proving the existence of equilibrium having specified properties is often synonymous with proving the result in trade theory. The Grandmont-McFadden proposition that any autarkic allocation can be replaced by a Pareto superior free trade equilibrium involving domestic transfers only depends on an existence proof, for example. Comparable proofs for free trade areas have not been provided to date because unharmonized tariffs imply goods prices that vary by member country and require potentially complicated rules of origin that block standard proofs. This paper fills this gap by providing the missing proof that starting from an arbitrary world trade equilibrium, a free trade area equilibrium can be found involving domestic transfers only that is at least as satisfactory for every consumer as the original allocation.Item Global Patent Protection: Channels of North & South Welfare Gain(2005-08-13T16:58:35Z) Grinols, Earl L., 1951-; Lin, Hwan C.Much of the dynamic literature on intellectual property protection (IPP) arrays goods along a segment of the real line, one endpoint of which expands with innovation. A single margin of innovation brings computational clarity, but implies that the innovating region cannot reassign its research and development efforts among multiple sectors. This leads to special results. This paper expands innovation to two dimensions and re-examines the question of North and South intellectual property protection. The model includes many of the features of earlier models but predicts avenues of cooperation and mutual interest that were previously unavailable. For example, the South may benefit from equal or even higher standards of IPP protection than in the North, and it is possible that the North gains from differentially weaker IPP enforcement in the South. The source of the different conclusions is traced to different channels of welfare influence that support the findings. Monopoly power is less important in explaining them than resource shifting between innovation sectors. Key features not previously found include the ability of lower Southern IPP to spur innovation of Northern goods and to make available greater resources for Northern production of current consumption.Item Pharmaceuticals, Prescription Plans, and Promoting Progress(2005-08-13T17:41:49Z) Grinols, Earl L., 1951-; Henderson, James W.Monopoly response to buyers who pay fraction c of the product cost is to raise the buyer price for the initial quantity q0 from p0 to 1/c p0, and adjust to a different price and quantity only if profits are thereby raised further. A 25% prescription drug plan co-payment provision, for example, magnifies the pharmaceutical patent holder’s profits more than a fourfold increase in price at the original output would do. This is detrimental to the adoption and use of prescription drug plans. In addition to the appearance of abusing a prescription drug program, the inducement to patentable pharmaceutical research and development (R&D) cannot be optimal both before and after such a plan’s institution. Possibly it is optimal in neither. This paper describes an efficient incentive plan for R&D that does not depend on monopoly and thus is not an impediment to co-pay provisions that might be part of a prescription drug plan.