Economist 3/4/15

  1. In the world of intellectual property, the term “patent troll” denotes a firm that owns a patent, but does not manufacture products or supply services based upon it. Although some patent portfolio managers, such as Intellectual Ventures, generate many of their own inventions, many others simply acquire patents and make money by suing firms that infringe them. These non-practicing entities (or NPEs) argue that this allows them to protect the rights of inventors who may not have the financial firepower to take on big firms. But the number of patent-related lawsuits has risen more than ten-fold since 2000. The most litigious NPEs file more than one lawsuit a week: one, Acacia Research, filed as many as 239 in 2013, according to RPX, a patent consultancy. But the new research finds that inventors only receive 5% of their patent’s value after successful infringement cases. The authors find in their data that firms that lost lawsuits against patent trolls or settled out of court spent on average $211m less on research and development than firms that won.
  2. A recent paper* by Uma Karmarkar of Harvard Business School and Bryan Bollinger of Duke Fuqua School of Business finds that shoppers who bring their own bags when they buy groceries like to reward themselves for it.The eco-shoppers were also more likely to buy sweets, ice cream and crisps.Psychologists call this sort of behaviour “moral licensing”: the tendency to indulge yourself for doing something virtuous.Moral licensing does not seem to occur when virtuous conduct is obligatory.In one study, participants imagined themselves doing community service. Then they were asked to pick between two rewards: an indulgent one (a pair of designer jeans) and a practical one (a vacuum cleaner).The best way to get people to do good, it seems, is to make them feel bad about themselves.
  3. Last October North Korea once again sealed its borders to almost all foreigners—this time fearing that the Ebola epidemic ravaging Guinea, Liberia and Sierra Leone might wreak havoc in its own impoverished country. It was the only country in the world to impose such stringent controls, despite being thousands of miles away from the outbreak. It barred all tourists from entering, and placed returning foreign aid workers and diplomats under a three-week quarantine in embassy compounds and homes.Only last week it made it clear that foreign runners were not to take part in a mid-April marathon in Pyongyang, the capital, one of the highlights of the tourist calendar. Yet on March 2nd foreign tour agencies operating in the country said that the travel restrictions had been lifted.All foreigners will need to check in at a hospital when they enter the country, but only visitors from a handful of African countries affected by the disease will continue to be quarantined.At home, the ban was repurposed as propaganda. America, the North’s state mouthpiece announced in late November, had developed the Ebola virus as a biological weapon.
  4. But Britain’s big four international banks—which include HSBC and Standard Chartered alongside Barclays and RBS—are now in trouble again.Last week, Barclays announced, its full-year profits for 2014 declined 17%. RBS posted a loss of £3.5 billion ($5.4 billion). This week’s news has got worse. On March 3rd Barclays revealed that its profits slid 21%. On March 4th Standard Chartered announced a 30% fall. Barclays’s investment arm, for instance, managed only a 2.7% return on equity in 2014, compared with the 11.9% return made in personal and business banking. As a result, they are now hacking back their operations.Last week, Lloyd’s, a purely domestic affair, revealed bumper profits and announced that it will pay its first dividend since the financial crisis. And in America the most highly rated banks—based on their share price relative to their book value—are a host of mid-sized domestically-focused firms, joined by Wells Fargo, a huge but all-American outfit.
  5. After it came to power in 1949, the Communist Party imposed frugality on Weddings in China. Dowries consisted of necessities like bed linen or a bicycle; guests brought their own food coupons. But since the 1980s the extravagance of nuptials has matched the country’s rise. Celebrations moved out of homes into hotels. Brides swapped traditional red dresses for white, flouncy meringue-like ones (some now wear both, in sequence).A large industry has emerged to serve the 13m couples who marry each year. Wedding planners are increasingly common, particularly in cities.An average wedding cost $12,000 in 2011 (the latest year for which such data exist)—the equivalent of more than two years’ income for the average urban household. An increase in the average marriage age by 2.5 years since 1990 has given parents (who still usually pay for weddings, despite the earning power of their children) more time to save up.. Love is far more often spoken about. The result is evident in weddings, which now focus on the couple. Both sets of parents are represented, but their position is peripheral. Weddings often feature a day of wedding photos, shot before the event.

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