This paper deals with economic analysis of trademark. Its presence in markets is originally connected with the problem of information asymmetries and the need to provide information for assisting exchanges, so as to avert the market failure brought about by adverse selection. However this information-conveying function is also accompanied by a differentiation effect, arising from the power of persuasion that signs can exert on individuals. The exploitation of differentiation has given rise to the practice of branding, which ties markets and consumption to the realms of meaning and experience. Branding is so all-pervasive in today's economy as to have somehow transfigured it, so that the role of persuasion is now pre-eminent. Nonetheless, the mainstream economic theory tends to resist acknowledging this change, which would to a large extent call into question well-established hypotheses and theoretical tools. The general response has therefore been to assume that the informational role of trademark predominates, and to use this hypothesis to construct models, welfare evaluations and policy prescriptions that bear little or no relation to the actual markets. The opposing approach -in the shadow of the Nelson's and Arrow's seminal papers on economics of information -is recognising the idiosyncratic character of information, and therefore drawing conclusions and devising solutions that, while still based upon the welfare criterion, also incorporate a wider awareness and a deeper representation of the scenario under study. The present work attempts to move in this direction, showing how different disciplines can provide some key epistemological tools for enabling economists to effectively evaluate the welfare outcomes of the introduction and progressive alteration of a particular intellectual property right within the realm of signs and meanings.

This paper attempts to shed light on the nexus of relationships existing between failure, bankruptcy, institutional context, and local characteristics on one hand and entrepreneurship, firm survival, and performance on the other. The aim is to provide a larger vantage point from which to read the research included in this issue with the overall ambition to contribute to a better understanding of our entrepreneurial societies and the role of failure within markets. In this respect, the focus here is mainly on the institutions governing the bankruptcy procedures which do much more than simply regulating the exit of insolvent firms and protecting creditors' investments, minimizing the social cost of failures. They set up the revolving doors through which creditors can reinvest the recovered capital in new entrepreneurial projects and failed entrepreneurs can bring back to the market their skills and their entrepreneurial spirit for fostering new and hopefully successful ventures. Therefore, by managing bankruptcy, the institutions are not only protecting the economy. Instead, they have become a tool of economic policy, devoted to the delicate issue of regulating a physiological event to the market while avoiding too much waste of resources. In a more positive perspective, managing insolvency and failure is also a mean to strengthen competitiveness and growth, making it possible to stimulate the market in reshuffling skills and resources into new activities. A deeper understanding can in turn contribute to the implementation of better and more efficient policies by integrating bankruptcy as a natural component of firm and market life.

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The aim of this paper is to summarize the extant theory as it relates to the economics of trademark, and to give some suggestions for further research with reference to distinct streams of literature. The proposed line of study inevitably looks at the complex relationship between signs and economics.Trademark is a sign introduced to remedy a market failure. It facilitates purchase decisions by indicating the provenance of the goods, so that consumers can identify specific quality attributes deriving from their own, or others', past experience. Trademark holders, on their part, have an incentive to invest in quality because they will be able to reap the benefits in terms of reputation.In other words, trademark law becomes an economic device which, opportunely designed, can produce incentives for maximizing market efficiency. This role must, of course, be recognized, as a vast body of literature has done, with its many positive economic consequences.Nevertheless, trademark appears to have additional economic effects that should be equally recognized: it can determine the promotion of market power and the emergence of rent-seeking behaviours. It gives birth to an idiosyncratic economics of signs where very strong protection tends to be assured, even though the welfare effects are as yet poorly understood. In this domain much remains to be done and the challenge to researchers is open.

Garrett Hardin’s “The Tragedy of the Commons” (1968) has been incredibly influential generally and within economics, and it remains important despite some historical and conceptual flaws. Hardin focused on the stress population growth inevitably placed on environmental resources. Unconstrained consumption of a shared resource—a pasture, a highway, a server—by individuals acting in rational pursuit of their self-interest can lead to congestion and, worse, rapid depreciation, depletion, and even destruction of the resources. Our societies face similar problems, with respect to not only environmental resources but also infrastructures, knowledge, and many other shared resources. In this article, we examine how the tragedy of the commons has fared within the economics literature and its relevance for economic and public policies today. We revisit the original piece to explain Hardin’s purpose and conceptual approach. We expose two conceptual mistakes he made: conflating resource with governance and conflating open access with commons. This critical discussion leads us to the work of Elinor Ostrom, the recent Nobel Prize in Economics laureate, who spent her life working on commons. Finally, we discuss a few modern examples of commons governance of shared resources.

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Abstract:The aim of this paper is to summarise the extant theory as it relates to the economics of trademark, and to give some suggestions for further research with reference to distinct streams of literature. The proposed line of study inevitably looks at the complex relationship between signs and economics. Trademark is a sign introduced to remedy a market failure. It facilitates purchase decisions by indicating the provenance of the goods, so that consumers can identify specific quality attributes deriving from their own, or others', past experience. Trademark holders, on their part, have an incentive to invest in quality because they will be able to reap the benefits in terms of reputation. In other words, trademark law becomes an economic device which, opportunely designed, can produce incentives for maximising market efficiency. This role must, of course, be recognised, as a vast body of literature has done, with its many positive economic consequences. Nevertheless, trademark appears to have additional economic effects that should be properly recognized: it can determine the promotion of market power and the emergence of rent-seeking behaviours. It gives birth to an idiosyncratic economics of signs where very strong protection tends to be assured, even though the welfare effects are as yet poorly understood. In this domain much remains to be done and the challenge to researchers is open.

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