COORDINATING INVENTIVE AND INNOVATIVE DECISIONS THROUGH MARKETS WITH PRICES: A Experimental Study of Patent Markets with Transparent Prices
Eskil Ullberg ()
No 231, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies
The patent system makes organized markets in patents with transparent prices possible. Such prices are here investigated as “signals” for inventors and innovators alike ofv aluable “technology areas”, in an experimental study. They inform decisions of specialized “firms” on allocation of resources for invention given a search space of induced technology values. The traditional hierarchical model of coordinating invention and innovation in a vertically integrated firm is replaced by coordination of these activities among specialized firms through a market with prices. The experimental study builds on a study focusing on price mechanisms with exogenous technology values to a study of an economic environment with “endogenous” technology values. The results suggest that coordination clearly takes place but differs considerably between the institutions and patent validity tested (a 3 x 2 design). As with the price study, demand-side bidding in both dimensions of the linear contract appears to yield the broadest search scope, and thus the best chances for the allocation of resources for invention. Multiple end-states are observed, especially for institutions with less demand-side bidding, indicating imprecise price signals for institutions similar to today’s personal exchange. Coordination with prices appears to increase the dynamic gains of the patent system through price information to reduce or better inform about the risk in investments in new technology.
Keywords: patents; intellectual property; trade; licensing; experiments (search for similar items in EconPapers)
JEL-codes: D02 D23 L14 L24 O32 O34 (search for similar items in EconPapers)
Pages: 21 pages
New Economics Papers: this item is included in nep-exp, nep-ino, nep-ipr and nep-pr~
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: Coordinating Inventive and Innovative Decisions through Markets with Prices: A Experimental Study of Patent Markets with Transparent Prices (2011)
Working Paper: Coordinating Inventive and Innovative Decisions Through Markets with Prices: An Experimental Study of Patent Markets with Transparent Prices (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0231
Access Statistics for this paper
More papers in Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Vardan Hovsepyan ().