Macroeconomic Instability and the Incentive to Innovate

Patent Licensing, Entry and the Incentive to Innovate

We analyze the economic impact of process innovations where the innovator auctions o licenses to both potential entrants and incumbent rms. It is shown that opening the market to entrant licensees, the incentive to innovate is maximized in a monopoly market as was envisioned by Schumpeter (1942). This is in contrast to previous literature on licensing of process innovations where entry is exclu...

Competition Policy and the Incentive to Innovate: The Dynamic Effects of Microsoft v. Commission

The Economic Incentive to Innovate in Plants: Patents and Plant Breedersâ•Ž Rights

The exclusivity conferred to inventors by intellectual property rights (IPRs) provide an ex ante incentive for innovation, but the resulting market power yields an ex post inefficiency (because it limits use of the innovation). Strong IPRs may also affect innovation by limiting access of proprietary knowledge in research aimed at new inventions and discoveries, which raises the question of whet...

The Economic Incentive to Innovate in Plants: Patents and Plant Breeders’ Rights

The exclusivity conferred to inventors by intellectual property rights (IPRs) provide an ex ante incentive for innovation, but the resulting market power yields an ex post inefficiency (because it limits use of the innovation). Strong IPRs may also affect innovation by limiting access of proprietary knowledge in research aimed at new inventions and discoveries, which raises the question of whet...

Monopoly and the Incentive to Innovate When Adoption Involves Switchover Disruptions

Arrow (1962) argued that since a monopoly restricts output relative to a competitive industry, it would be less willing to pay a fixed cost to adopt a new technology. Arrow’s idea has been challenged and critiques have shown that under different assumptions, increases in competition lead to less innovation. We develop a new theory of why a monopolistic industry innovates less than a competitive...