Book contents
- On the Shoulders of Giants
- Econometric Society Monographs
- On the Shoulders of Giants
- Copyright page
- Dedication
- Contents
- Contributors
- Preface
- Acknowledgments
- Chapter 1 Introduction
- Part I Threads in the Tapestry
- Part II Innovation Theory (I): Cumulative Innovation
- Chapter 14 The Giant’s Shoulders
- Chapter 15 Reimagining Innovation Theory: Suzanne Scotchmer and the Ideas Model
- Chapter 16 N. Gallini and S. Scotchmer, “Intellectual Property: When Is It the Best Incentive System?” (2002)
- Chapter 17 Suzanne Scotchmer, “Standing on the Shoulders of Giants: Cumulative Research and the Patent Law” (1991) and Jerry Green and Suzanne Scotchmer, “On the Division of Profit in Sequential Innovation” (1995)
- Chapter 18 Ted O’Donoghue, Suzanne Scotchmer, and Jacques Thisse, “Patent Breadth, Patent Life, and the Pace of Technological Progress” (1998)
- Part III Innovation Theory (II): Law and Economics
- Part IV Club Theory
- Part V Evolutionary Game Theory
- Part VI Public Policy
- Part VII Living Legacy
- Part VIII Epilog
- Bibliography
- Index
- References
Chapter 17 - Suzanne Scotchmer, “Standing on the Shoulders of Giants: Cumulative Research and the Patent Law” (1991) and Jerry Green and Suzanne Scotchmer, “On the Division of Profit in Sequential Innovation” (1995)
from Part II - Innovation Theory (I): Cumulative Innovation
Published online by Cambridge University Press: 12 October 2017
Edited by
Book contents
- On the Shoulders of Giants
- Econometric Society Monographs
- On the Shoulders of Giants
- Copyright page
- Dedication
- Contents
- Contributors
- Preface
- Acknowledgments
- Chapter 1 Introduction
- Part I Threads in the Tapestry
- Part II Innovation Theory (I): Cumulative Innovation
- Chapter 14 The Giant’s Shoulders
- Chapter 15 Reimagining Innovation Theory: Suzanne Scotchmer and the Ideas Model
- Chapter 16 N. Gallini and S. Scotchmer, “Intellectual Property: When Is It the Best Incentive System?” (2002)
- Chapter 17 Suzanne Scotchmer, “Standing on the Shoulders of Giants: Cumulative Research and the Patent Law” (1991) and Jerry Green and Suzanne Scotchmer, “On the Division of Profit in Sequential Innovation” (1995)
- Chapter 18 Ted O’Donoghue, Suzanne Scotchmer, and Jacques Thisse, “Patent Breadth, Patent Life, and the Pace of Technological Progress” (1998)
- Part III Innovation Theory (II): Law and Economics
- Part IV Club Theory
- Part V Evolutionary Game Theory
- Part VI Public Policy
- Part VII Living Legacy
- Part VIII Epilog
- Bibliography
- Index
- References
Summary
In markets with sequential innovation, inventors of derivative improvements might undermine the profit of initial innovators through competition. Profit erosion can be mitigated by broadening the first innovator’s patent protection and/or by permitting cooperative agreements between the initial innovators and later innovators. We investigate the policy that is more effective at ensuring the first innovator earns a large share of profit from the second-generation product it facilitates. In general, not all the profit can be transferred to the first innovator, and therefore patents should last longer when a sequence of innovations is undertaken by different firms rather than being concentrated in one firm.
- Type
- Chapter
- Information
- On the Shoulders of GiantsColleagues Remember Suzanne Scotchmer's Contributions to Economics, pp. 55 - 84Publisher: Cambridge University PressPrint publication year: 2017
References
References
d’Aspremont, C., and Jacquemin, A., “Cooperative and Noncooperative R&D in Duopoly with Spillovers,” American Economic Review, 1988, 78, 1133–1137.Google Scholar
Bhattacharya, S., Glazer, J., and Sappington, D., “Motivating Exchange of Knowledge in R&D Ventures: First-Best Implementation,” Bell Communications Research, Technical Memorandum, 1988.Google Scholar
Choi, Jay P., “An Analysis of Cooperative R&D,” mimeo, Dept. of Economics, Harvard University, 1989.Google Scholar
Gandal, N., and Scotchmer, S., “Coordinating Research Through Research Joint Ventures,” GSPP Working Paper #171, University of California, Berkeley, 1989.Google Scholar
Gilbert, Richard and Shapiro, Carl, “Optimal Patent Length and Breadth,” The RAND Journal of Economics, 1990, 21, 106–112.CrossRefGoogle Scholar
Green, J., and Scotchmer, S., “Antitrust Policy, the Breadth of Patent Protection and the Incentive to Develop New Products,” GSPP Working Paper #171 (revised), University of California, Berkeley, 1990.Google Scholar
Jacquemin, A., “Cooperative Agreements in R&D and European Antitrust Policy,” European Economic Review, 1988, 32, 551–560.CrossRefGoogle Scholar
Katz, M., “An Analysis of Cooperative Research and Development,” The RAND Journal of Economics, 1986, 17, 527–543.Google Scholar
Klemperer, Paul, “How Broad should the Scope of Patent Protection Be?” The RAND Journal of Economics, Spring 1990, 21, 113–130.CrossRefGoogle Scholar
Loury, Glenn C., “Market Structure and Innovation,” Quarterly Journal of Economics 1979, XCIII, 395–410.CrossRefGoogle Scholar
Mansfield, Edwin, “R&D and Innovation: Some Empirical Findings,” in Griliches, Zvi ed., R&D, Patents and Productivity. Chicago: University of Chicago Press for the National Bureau of Economic Research, 1984.Google Scholar
Ordover, Janusz, and Baumol, William J., “Antitrust for High-Technology Industries: Assessing Research Joint ventures and Mergers,” Journal of Law and Economics 1985 XXVIII, 331–331.Google Scholar
Scotchmer, S. “Protecting Early Innovators: Should Accessory Products, Bundled Improvements and Applications Be Patentable?,” GSPP Working Paper #183, University of California, Berkeley, 1990.Google Scholar
Scotchmer, S., and Green, J., “Novelty and Disclosure in Patent Law,” The RAND Journal of Economics, 1990, 21, 131–146.Google Scholar
Wright, Brian, “The Economics of Innovation Incentives: Patents, Prizes and Research Contracts,” American Economic Review, 1983, 73, 619–707.Google Scholar
References
Chang, H. F. “Patent Scope, Antitrust Policy, and Cumulative Innovation,” RAND Journal of Economics, Vol. 26 (1995), pp. 34–57.Google Scholar
Dasgupta, P. and Stiglitz, J. “Uncertainty, Industrial Structure, and the Speed of R&D.” Bell Journal of Economics, Vol. 11 (1980), pp. 1–28.Google Scholar
D’Aspremont, C. and Jacquemin, A. “Cooperative and Noncooperative R&D in Duopoly with Spillover.” American Economic Review, Vol. 80 (1990) pp. 641–642.Google Scholar
Gallini, N. T. “Deterrence by Market Sharing: A Strategic Incentive for Licensing.” American Economic Review, Vol. 74 (1984), pp. 931–941.Google Scholar
Gandal, N. and Scotchmer, S. “Coordinating Research through Research Joint Ventures.” Journal of Public Economics, Vol. 51 (1993), pp. 173–193.Google Scholar
Gilbert, R. and Shapiro, C. “Optimal Patent Length and Breadth.” RAND Journal of Economics, Vol. 21 (1990), pp. 106–112.CrossRefGoogle Scholar
Green, J. and Scotchmer, S. “Antitrust Policy, the Breadth of Patent Protection and the Incentive to Develop New Products.” H.I.E.R. Working Paper, Harvard University, December 1989.Google Scholar
Horbulyk, T. M. “Compulsory Licensing of Innovation and the Incentives for Cumulative Research.” Mimeo. University of Calgary, 1991.Google Scholar
Klemperer, P. “How Broad Should the Scope of Patent Protection Be?” RAND Journal of Economics, Vol. 21 (1990), pp. 113–130.Google Scholar
Loury, G. C. “Market Structure and Innovation.” Quarterly Journal of Economics, Vol. 93 (1979), pp. 395–410.Google Scholar
Matutes, C., Regibeau, P., and Rockett, K. E. “Optimal Patent Protection and the Diffusion of Innovation.” Mimeo, Department of Economics, Northwestern University, December 1990.Google Scholar
Merges, R. P. “Uncertainty and the Standard of Patentability.” High Technology Law Journal, Vol. 7 (1992a), pp. 1–70.Google Scholar
Merges, R. P.. “On Limiting or Encouraging Rivalry in Technical Progress: The Effect of Patent Scope Decisions,” Center for Law and Economics Studies Working Paper no. 72, Columbia University, 1992b.Google Scholar
Merges, R. P. and Nelson, R. R. “On the Complex Economics of Patent Scope.” Columbia Law Review, Vol. 90 (1990), pp. 839–916.Google Scholar
Merges, R. P. and Nelson, R. R. “On Limiting or Encouraging Rivalry in Technical Progress: The Effect of Patent Scope Decisions,” Center for Research in Management, Consortium on Competitiveness and Cooperation, Working Paper no. 92–8, University of California, Berkeley, 1992.Google Scholar
Scotchmer, S. “Standing on the Shoulders of Giants: Cumulative Research and the Patent Law.” Journal of Economic Perspectives, Vol. 5 (1991a), pp. 29–41.Google Scholar
Scotchmer, S. “Protecting Early Innovators: Should Second Generations Products be Patentable?” Graduate School of Public Policy Working Paper no., 183, University of California, Berkeley 1991b.Google Scholar
Scotchmer, S. “Patents as an Incentive System.” Proceedings of the 1992 World Congress of the International Ecomoics Association, Paris, forthcoming.Google Scholar
Spence, A. M. “Cost Reduction, Competition, and Industry Performance.” Econometrica, Vol. 52 (1984), pp. 101–121.Google Scholar