Patent races and pennant races: A new rationale for revenue sharing in sports leagues

Thomas J. Miceli

Economics Letters, 2024, vol. 234, issue C

Abstract: This paper draws an analogy between patent races and pennant races. Both involve externalities: investments by individual firms (teams) produce spillover benefits, but they also precipitate a race to be first. In both contexts, the granting of partial rights to the winner balances these effects. In the case of inventions this takes the form of time-limited patents; in sports competition it takes the form of revenue sharing. This conclusion provides a justification for revenue sharing that differs from the usual claim that it promotes competitive balance.

Keywords: Patent race Pennant race; Revenue sharing (search for similar items in EconPapers)
JEL-codes: O31 Z20 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523005141

DOI: 10.1016/j.econlet.2023.111488

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