Economics of Patents: An Overview, The

Corinne Langinier and GianCarlo Moschini

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: In this paper, we review the economic effects of intellectual property rights and specifically address the economics of the patent system. The production and dissemination of new knowledge is fraught with market failures because knowledge is a public good. Patents provide a second-best solution to the resulting appropriability problem. We review the main benefits and costs of the patent system, focusing on the role that patents play in providing incentives for innovation, in promoting the dissemination of knowledge, and in helping technology transfer and commercialization of new technology. From a more normative perspective, we address the questions of what the features of an optimal patent system are and whether the patent system is socially desirable. We examine the problem of the optimal length and scope of patent protection, both for the case of a single innovation and for the richer case of cumulative innovations. Finally, we review the issues related to how the patent system influences the market structure and research and development investments.

Date: 2002-01-01
New Economics Papers: this item is included in nep-agr, nep-ent and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Working Paper: Economics of Patents: An Overview, The (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:2061

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