Ramifications of operating a Business & Industry Development Center as an auxiliary enterprise

GMI, formerly the General Motors Institute, estabilished a Business and Industry Development (BID) Center in 1983 for the purpose of promoting economic development in Michigan's Flint/Genessee County. BID has had its ups and downs, and is now a going operation. Its experience shows that academic resources can be used to promote regional development. BID has provided an alternative for innovative faculty who are not comfortable with the traditional academic research culture. It is part of a system of business and technical resources, an incubation environment, and available venture capital. For the BID system to work efficiently, however, legislation is needed that would exclude academic institutions from tax liability on income from utilization of their resources and staffs in assisting spinoff and startup companies in developing within their contituencies and communities.     

Amend the old or address the new: Broad-based legislation when proposing policies is costly

If each legislator wishes to encourage other legislators to address new problems in future periods, then a subgame perfect Nash equilibrium can exist with the following properties: (1) no legislator finds it worthwhile to make a narrow proposal that appeals to a minimum majority; (2) instead, legislators propose policies that appeal to all members, not for fear of retaliation, but rather to encourage other members to work on new problems in succeeding periods; (3) in succeeding periods no legislator amends the existing broad policy. We find an equilibrium with these properties in finite as well as infinite period games.