Experimentation, Patents, and Innovation
This paper studies a simple model of experimentation and innovation. Our analysis suggests that patents improve the allocation of resources by encouraging rapid experimentation and efficient ex post transfer of knowledge. Each firm receives a signal on the success probability of a project and decide...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Economic Association
2011
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| Online Access: | http://hdl.handle.net/1721.1/61714 https://orcid.org/0000-0002-1827-1285 https://orcid.org/0000-0003-0908-7491 |
| _version_ | 1811070520154652672 |
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| author | Acemoglu, Daron Bimpikis, Konstantinos Ozdaglar, Asuman E. |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Acemoglu, Daron Bimpikis, Konstantinos Ozdaglar, Asuman E. |
| author_sort | Acemoglu, Daron |
| collection | MIT |
| description | This paper studies a simple model of experimentation and innovation. Our analysis suggests that patents improve the allocation of resources by encouraging rapid experimentation and efficient ex post transfer of knowledge. Each firm receives a signal on the success probability of a project and decides when to experiment. Successes can be copied. First, we assume that signal qualities are the same. Symmetric equilibria involve delayed and staggered experimentation, whereas the optimal allocation never involves delays and may involve simultaneous experimentation. Appropriately designed patents implement the optimal allocation. Finally, we discuss the case when signals differ and are private information. |
| first_indexed | 2024-09-23T08:37:20Z |
| format | Article |
| id | mit-1721.1/61714 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:37:20Z |
| publishDate | 2011 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/617142022-09-30T10:01:05Z Experimentation, Patents, and Innovation Acemoglu, Daron Bimpikis, Konstantinos Ozdaglar, Asuman E. Massachusetts Institute of Technology. Department of Economics Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science Acemoglu, Daron Acemoglu, Daron Bimpikis, Konstantinos Ozdaglar, Asuman E. This paper studies a simple model of experimentation and innovation. Our analysis suggests that patents improve the allocation of resources by encouraging rapid experimentation and efficient ex post transfer of knowledge. Each firm receives a signal on the success probability of a project and decides when to experiment. Successes can be copied. First, we assume that signal qualities are the same. Symmetric equilibria involve delayed and staggered experimentation, whereas the optimal allocation never involves delays and may involve simultaneous experimentation. Appropriately designed patents implement the optimal allocation. Finally, we discuss the case when signals differ and are private information. 2011-03-17T19:36:22Z 2011-03-17T19:36:22Z 2011-02 Article http://purl.org/eprint/type/JournalArticle 1945-7669 1945-7685 http://hdl.handle.net/1721.1/61714 Acemoglu, Daron, Kostas Bimpikis, and Asuman Ozdaglar. 2011. "Experimentation, Patents, and Innovation." American Economic Journal: Microeconomics, 3(1): 37–77. https://orcid.org/0000-0002-1827-1285 https://orcid.org/0000-0003-0908-7491 en_US http://dx.doi.org/10.1257/mic.3.1.37 American Economic Journal: Microeconomics Creative Commons Attribution-Noncommercial-Share Alike 3.0 http://creativecommons.org/licenses/by-nc-sa/3.0/ application/pdf American Economic Association MIT web domain |
| spellingShingle | Acemoglu, Daron Bimpikis, Konstantinos Ozdaglar, Asuman E. Experimentation, Patents, and Innovation |
| title | Experimentation, Patents, and Innovation |
| title_full | Experimentation, Patents, and Innovation |
| title_fullStr | Experimentation, Patents, and Innovation |
| title_full_unstemmed | Experimentation, Patents, and Innovation |
| title_short | Experimentation, Patents, and Innovation |
| title_sort | experimentation patents and innovation |
| url | http://hdl.handle.net/1721.1/61714 https://orcid.org/0000-0002-1827-1285 https://orcid.org/0000-0003-0908-7491 |
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