Rewarding Sequential Innovators: Prizes, Patents and Buyouts

Gerard Llobet, Hugo A. Hopenhayn and Matthew Mitchell ()

Working Papers from Centro de Estudios Monetarios Y Financieros-

Abstract: This paper presents a model of cumulative innovation where firms are heterogeneous in their research ability. We study the optimal reward policy when the quality of the ideas and their subsequent development effort are private information. The optimal assignment of property rights must counterbalance the incentives of current and future innovators. The resulting mechanism resembles a menu of patents that have infinite duration and fixed scope, where the latter increases in the value of the idea.

Keywords: PATENTS; INNOVATIONS; LICENSING (search for similar items in EconPapers)
JEL-codes: D43 D82 L51 O31 (search for similar items in EconPapers)
Date: 2000
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Related works:
Working Paper: Rewarding sequential innovators: prizes, patents and buyouts (2000)
Working Paper: Rewarding Sequential Innovators: Prizes, Patents and Buyouts (2003)
Journal Article: Rewarding Sequential Innovators: Prizes, Patents, and Buyouts (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:fth:cemfdt:0012

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