Managing dynamic competition

In many important high-technology markets, including software development, data processing, communications, aeronautics, and defense, suppliers learn through experience how to provide better service at lower cost. This paper examines how a buyer designs dynamic competition among rival suppliers to exploit learning economies while minimizing the costs of becoming locked in to one producer. Strategies for controlling dynamic competition include the handicapping of more efficient suppliers in procurement competitions, the protection and allocation of intellectual property, and the sharing of information among rival suppliers. (JEL C73, D44, L10).

Serotonin transporter genotype modulates social reward and punishment in rhesus macaques

Background: Serotonin signaling influences social behavior in both human and nonhuman primates. In humans, variation upstream of the promoter region of the serotonin transporter gene (5-HTTLPR) has recently been shown to influence both behavioral measures of social anxiety and amygdala response to social threats. Here we show that length polymorphisms in 5-HTTLPR predict social reward and punishment in rhesus macaques, a species in which 5-HTTLPR variation is analogous to that of humans. Methodology/Principal Findings: In contrast to monkeys with two copies of the long allele (L/L), monkeys with one copy of the short allele of this gene (S/L) spent less time gazing at face than non-face images, less time looking in the eye region of faces, and had larger pupil diameters when gazing at photos of a high versus low status male macaques. Moreover, in a novel primed gambling task, presentation of photos of high status male macaques promoted risk-aversion in S/L monkeys but promoted risk-seeking in L/L monkeys. Finally, as measured by a "pay-per-view" task, S/L monkeys required juice payment to view photos of high status males, whereas L/L monkeys sacrificed fluid to see the same photos. Conclusions/Significance: These data indicate that genetic variation in serotonin function contributes to social reward and punishment in rhesus macaques, and thus shapes social behavior in humans and rhesus macaques alike. © 2009 Watson et al.

Entry and competition in generic biologics

Patents for several blockbuster biological products are expected to expire soon. The Food and Drug Administration is examining whether biologies can and should be treated like pharmaceuticals with regard to generics. In contrast with pharmaceuticals, which are manufactured through chemical synthesis, biologies are manufactured through fermentation, a process that is more variable and costly. Regulators might require extensive clinical testing of generic biologies to demonstrate equivalence to the branded product. The focus of the debate on generic biologies has been on legal and health concerns, but there are important economic implications. We combine a theoretical model of generic biologies with regression estimates from generic pharmaceuticals to estimate market entry and prices in the generic biologic market. We find that generic biologies will have high fixed costs from clinical testing and from manufacturing, so there will be less entry than would be expected for generic pharmaceuticals. With fewer generic competitors, generic biologies will be relatively close in price to branded biologies. Policy makers should be prudent in estimating financial benefits of generic biologies for consumers and payers. We also examine possible government strategies to promote generic competition. Copyright © 2007 John Wiley & Sons, Ltd.

Evolving brand-name and generic drug competition may warrant a revision of the Hatch-Waxman Act.

The evolution of pharmaceutical competition since Congress passed the Hatch-Waxman Act in 1984 raises questions about whether the act's intended balance of incentives for cost savings and continued innovation has been achieved. Generic drug usage and challenges to brand-name drugs' patents have increased markedly, resulting in greatly increased cost savings but also potentially reduced incentives for innovators. Congress should review whether Hatch-Waxman is achieving its intended purpose of balancing incentives for generics and innovation. It also should consider whether the law should be amended so that some of its provisions are brought more in line with recently enacted legislation governing approval of so-called biosimilars, or the corollary for biologics of generic competition for small-molecule drugs.

Decision making across social contexts: Competition increases preferences for risk in chimpanzees and bonobos

Context can have a powerful influence on decision-making strategies in humans. In particular, people sometimes shift their economic preferences depending on the broader social context, such as the presence of potential competitors or mating partners. Despite the important role of competition in primate conspecific interactions, as well as evidence that competitive social contexts impact primates' social cognitive skills, there has been little study of how social context influences the strategies that nonhumans show when making decisions about the value of resources. Here we investigate the impact of social context on preferences for risk (variability in payoffs) in our two closest phylogenetic relatives, chimpanzees, Pan troglodytes, and bonobos, Pan paniscus. In a first study, we examine the impact of competition on patterns of risky choice. In a second study, we examine whether a positive play context affects risky choices. We find that (1) apes are more likely to choose the risky option when making decisions in a competitive context; and (2) the play context did not influence their risk preferences. Overall these results suggest that some types of social contexts can shift patterns of decision making in nonhuman apes, much like in humans. Comparative studies of chimpanzees and bonobos can therefore help illuminate the evolutionary processes shaping human economic behaviour. © 2012 The Association for the Study of Animal Behaviour.

Reason, risk, and reward: Models for libraries and other stakeholders in an evolving scholarly publishing ecosystem

Scholarly publishing, and scholarly communication more generally, are based on patterns established over many decades and even centuries. Some of these patterns are clearly valuable and intimately related to core values of the academy, but others were based on the exigencies of the past, and new opportunities have brought into question whether it makes sense to persist in supporting old models. New technologies and new publishing models raise the question of how we should fund and operate scholarly publishing and scholarly communication in the future, moving away from a scarcity model based on the exchange of physical goods that restricts access to scholarly literature unless a market-based exchange takes place. This essay describes emerging models that attempt to shift scholarly communication to a more open-access and mission-based approach and that try to retain control of scholarship by academics and the institutions and scholarly societies that support them. It explores changing practices for funding scholarly journals and changing services provided by academic libraries, changes instituted with the end goal of providing more access to more readers, stimulating new scholarship, and removing inefficiencies from a system ready for change. © 2014 by the American Anthropological Association.

Inhibition-Induced Forgetting Results from Resource Competition between Response Inhibition and Memory Encoding Processes.

UNLABELLED: Response inhibition is a key component of executive control, but its relation to other cognitive processes is not well understood. We recently documented the "inhibition-induced forgetting effect": no-go cues are remembered more poorly than go cues. We attributed this effect to central-resource competition, whereby response inhibition saps attention away from memory encoding. However, this proposal is difficult to test with behavioral means alone. We therefore used fMRI in humans to test two neural predictions of the "common resource hypothesis": (1) brain regions associated with response inhibition should exhibit greater resource demands during encoding of subsequently forgotten than remembered no-go cues; and (2) this higher inhibitory resource demand should lead to memory encoding regions having less resources available during encoding of subsequently forgotten no-go cues. Participants categorized face stimuli by gender in a go/no-go task and, following a delay, performed a surprise recognition memory test for those faces. Replicating previous findings, memory was worse for no-go than for go stimuli. Crucially, forgetting of no-go cues was predicted by high inhibitory resource demand, as quantified by the trial-by-trial ratio of activity in neural "no-go" versus "go" networks. Moreover, this index of inhibitory demand exhibited an inverse trial-by-trial relationship with activity in brain regions responsible for the encoding of no-go cues into memory, notably the ventrolateral prefrontal cortex. This seesaw pattern between the neural resource demand of response inhibition and activity related to memory encoding directly supports the hypothesis that response inhibition temporarily saps attentional resources away from stimulus processing. SIGNIFICANCE STATEMENT: Recent behavioral experiments showed that inhibiting a motor response to a stimulus (a "no-go cue") impairs subsequent memory for that cue. Here, we used fMRI to test whether this "inhibition-induced forgetting effect" is caused by competition for neural resources between the processes of response inhibition and memory encoding. We found that trial-by-trial variations in neural inhibitory resource demand predicted subsequent forgetting of no-go cues and that higher inhibitory demand was furthermore associated with lower concurrent activation in brain regions responsible for successful memory encoding of no-go cues. Thus, motor inhibition and stimulus encoding appear to compete with each other: when more resources have to be devoted to inhibiting action, less are available for encoding sensory stimuli.

Cumulative stress in childhood is associated with blunted reward-related brain activity in adulthood.

Early life stress (ELS) is strongly associated with negative outcomes in adulthood, including reduced motivation and increased negative mood. The mechanisms mediating these relations, however, are poorly understood. We examined the relation between exposure to ELS and reward-related brain activity, which is known to predict motivation and mood, at age 26, in a sample followed since kindergarten with annual assessments. Using functional neuroimaging, we assayed individual differences in the activity of the ventral striatum (VS) during the processing of monetary rewards associated with a simple card-guessing task, in a sample of 72 male participants. We examined associations between a cumulative measure of ELS exposure and VS activity in adulthood. We found that greater levels of cumulative stress during childhood and adolescence predicted lower reward-related VS activity in adulthood. Extending this general developmental pattern, we found that exposure to stress early in development (between kindergarten and grade 3) was significantly associated with variability in adult VS activity. Our results provide an important demonstration that cumulative life stress, especially during this childhood period, is associated with blunted reward-related VS activity in adulthood. These differences suggest neurobiological pathways through which a history of ELS may contribute to reduced motivation and increased negative mood.