Question

Essay question (1).

1. (10) We discussed R&D (research and development) as a driver of productivity growth. In that context, we saw that intellectual property rights protection often is set to balance ex ante and ex post efficiency.

a. Describe what is meant by ex ante and ex post efficiency in this context. How do the two perspectives on efficiency differ?

b. What type of intellectual property rights protection is argued for from the ex ante efficiency perspective? From the ex post efficiency perspective? Why?

c. How does developed countries’ intellectual property rights protection typically seek to balance these two efficiency considerations?

d. Which perspective on efficiency, ex ante or ex post, is a developed country likely to stress in international negotations? A developing country? Why?

Answer 1

A) Ex ante means something based on forecast rather than facts. It refers to future events , such as the profits and resturns if the company. It is Latin which means before event. So it is basically an assumption we make on the basis of the previous history. Much of the analysis that is made in markets in ex- ante which means decisions are made on the long term cash flow of the market. Ex ante efficiency is the progress made in economy through assumption. For example the government makes ex ante decisions while planning the budget and they run the whole country on the basis of that and most of the time they do it successfully. While ex post is Latin for after the event. The ex post efficiency is something that is based on facts it is when we tell something on the basis of an event that has already happened and judge the efficiency of the policy.

B) intellectual property rights are rights on an individual's intellect regardless of the form it is expressed in they are of many types copyright, patent trademark and trade secrets . According to ex ante perspective the intellectual rights are justified as the goal of intellectual property is to bring about change in the minds and social patterns of the person's behaviour. It has a creative incentive and it's effect is unknown before it is released in the market and the rights are taken prior to any event taking place . According to ex post philosophy the intellectual property rights should be given to an individual only when it is in the market. That is after the event has happened.

C) A developed country like u.s has already realised the importance of intellectual property rights and so they are making laws and regulations to provide these rights to the ide of an individual. To strike a balance between them they provide such rights to bigger firms ex ante and to new comers ex post and after a thorough research and proof of no plagiarism.

D) A developed country will more likely to stress on ex ante efficiency because it must have a stable and predictable graph of the economy on basis of which further policies can be decided and their efficiency would be more than 90% even before they would be put into practice and they will even have trust from around the world. While developing countries will argur for ex post efficiency because of the unstable position of these countries. While developing they need help from various sources so they would prefer to focus on ex post efficiency