Intermediation in Innovation

Heidrun Hoppe-Wewetzer and Emre Ozdenoren

No 4891, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The paper offers a new theoretical framework to examine the role of intermediaries between creators and users of new inventions. We find that uncertainty about the profitability of investing in new inventions generates a basis for intermediation. An intermediary may provide an opportunity to economize on a critical component of efficient investment decisions - the expertise to sort `profitable' from `unprofitable' inventions. Our findings may help explain the surge in university patenting and licensing since the Bayh-Dole Act of 1980. The study also identifies several limitations to the potential efficiency of intermediation in innovation.

Keywords: Intermediation; Market microstructure; Matching; Uncertainty; Innovation; Patent licensing (search for similar items in EconPapers)
JEL-codes: D40 D80 L12 L13 O32 (search for similar items in EconPapers)
Date: 2005-02
New Economics Papers: this item is included in nep-ino, nep-mic and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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