How do competitive pressures affect incentives to innovate when there is a market for inventions?

Research output: Contribution to journalArticlepeer-review

27 Scopus citations

Abstract

Competition and intellectual property (IP) protections are complements in stimulating innovation. When IP is appropriable, a market for inventions forms and competitive pressures increase incentives to innovate. Competition among producers, the demand side of the market for inventions, and competition among inventors, the supply side of the market for inventions, create incentives to innovate. When IP is not fully appropriable, markets for inventions are limited and competitive pressures can decrease incentives to innovate. Firms vertically integrate R&D and production and share technology to appropriate the returns to IP. This implies that antitrust policy and IP protections are complements.

Original languageEnglish (US)
Pages (from-to)1007-1054
Number of pages48
JournalJournal of Political Economy
Volume121
Issue number6
DOIs
StatePublished - Dec 1 2013

ASJC Scopus subject areas

  • Economics and Econometrics

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