Evaluating the federal role in financing health-related research

This paper considers the appropriate role for government in the support of scientific and technological progress in health care; the information the federal government needs to make well-informed decisions about its role; and the ways that federal policy toward research and development should respond to scientific advances, technology trends, and changes in the political and social environment. The principal justification for government support of research rests upon economic characteristics that lead private markets to provide inappropriate levels of research support or to supply inappropriate quantities of the products that result from research. The federal government has two basic tools for dealing with these problems: direct subsidies for research and strengthened property rights that can increase the revenues that companies receive for the products that result from research. In the coming years, the delivery system for health care will continue to undergo dramatic changes, new research opportunities will emerge at a rapid pace, and the pressure to limit discretionary federal spending will intensify. These forces make it increasingly important to improve the measurement of the costs and benefits of research and to recognize the tradeoffs among alternative policies for promoting innovation in health care.

Relatedness threshold for the production of female sexuals in colonies of a polygynous ant, Myrmica tahoensis, as revealed by microsatellite DNA analysis.

The genetic relationships of colony members in the ant Myrmica tahoensis were determined on the basis of highly polymorphic microsatellite DNA loci. These analyses show that colonies fall into one of two classes. In roughly half of the sampled colonies, workers and female offspring appear to be full sisters. The remaining colonies contain offspring produced by two or more queens. Colonies that produce female sexuals are always composed of highly related females, while colonies that produce males often show low levels of nestmate relatedness. These results support theoretical predictions that workers should skew sex allocation in response to relatedness asymmetries found within colonies. The existence of a relatedness threshold below which female sexuals are not produced suggests a possible mechanism for worker perception of relatedness. Two results indicate that workers use genetic cues, not queen number, in making sex-allocation decisions. (i) The number of queens in a colony was not significantly correlated with either the level of relatedness asymmetry or the sex ratio. (ii) Sex-ratio shifts consistent with a genetically based mechanism of relatedness assessment were seen in an experiment involving transfers of larvae among unrelated nests. Thus workers appear to make sex-allocation decisions on the basis of larval cues and appear to be able to adjust sex ratios long after egg laying.

An economic analysis of unilateral refusals to license intellectual property

The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the intellectual property. However, the antitrust laws constrain the use of property, including intellectual property, by a firm with market power and may place limitations on the licensing of intellectual property. This paper focuses on one aspect of antitrust law, the so-called “essential facilities doctrine,” which may impose a duty upon firms controlling an “essential facility” to make that facility available to their rivals. In the intellectual property context, an obligation to make property available is equivalent to a requirement for compulsory licensing. Compulsory licensing may embrace the requirement that the owner of software permit access to the underlying code so that others can develop compatible application programs. Compulsory licensing may undermine incentives for research and development by reducing the value of an innovation to the inventor. This paper shows that compulsory licensing also may reduce economic efficiency in the short run by facilitating the entry of inefficient producers and by promoting licensing arrangements that result in higher prices.

Approximation algorithms

Increasing global competition, rapidly changing markets, and greater consumer awareness have altered the way in which corporations do business. To become more efficient, many industries have sought to model some operational aspects by gigantic optimization problems. It is not atypical to encounter models that capture 106 separate “yes” or “no” decisions to be made. Although one could, in principle, try all 2106 possible solutions to find the optimal one, such a method would be impractically slow. Unfortunately, for most of these models, no algorithms are known that find optimal solutions with reasonable computation times. Typically, industry must rely on solutions of unguaranteed quality that are constructed in an ad hoc manner. Fortunately, for some of these models there are good approximation algorithms: algorithms that produce solutions quickly that are provably close to optimal. Over the past 6 years, there has been a sequence of major breakthroughs in our understanding of the design of approximation algorithms and of limits to obtaining such performance guarantees; this area has been one of the most flourishing areas of discrete mathematics and theoretical computer science.

Hypothesis testing and earthquake prediction.

Requirements for testing include advance specification of the conditional rate density (probability per unit time, area, and magnitude) or, alternatively, probabilities for specified intervals of time, space, and magnitude. Here I consider testing fully specified hypotheses, with no parameter adjustments or arbitrary decisions allowed during the test period. Because it may take decades to validate prediction methods, it is worthwhile to formulate testable hypotheses carefully in advance. Earthquake prediction generally implies that the probability will be temporarily higher than normal. Such a statement requires knowledge of "normal behavior"--that is, it requires a null hypothesis. Hypotheses can be tested in three ways: (i) by comparing the number of actual earth-quakes to the number predicted, (ii) by comparing the likelihood score of actual earthquakes to the predicted distribution, and (iii) by comparing the likelihood ratio to that of a null hypothesis. The first two tests are purely self-consistency tests, while the third is a direct comparison of two hypotheses. Predictions made without a statement of probability are very difficult to test, and any test must be based on the ratio of earthquakes in and out of the forecast regions.

Adaptive plasticity in hatching age: a response to predation risk trade-offs.

The life histories of many animals are characterized by niche shifts, the timing of which can strongly affect fitness. In the tree frog Agalychnis callidryas, which has arboreal eggs, there is a trade-off between predation risks before and after hatching. When eggs are attacked by snakes, tadpoles escape by hatching rapidly and falling into the water below. Eggs not attacked by snakes hatch later, when newly emerged tadpoles are less vulnerable to aquatic predators. Plasticity in hatching allows embryos to use immediate, local information on risk of mortality to make instantaneous behavioral decisions about hatching and the accompanying shift from arboreal to aquatic habitats.