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Commercial Incentives in Academia

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Author Info
Albert Banal-Estañol () (Department of Economics, City University, London)
Inés Macho-Stadler () (Universitat Autònoma de Barcelona, Departament d’Economia i d’Història Econòmica)

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Abstract

This paper investigates the effects of monetary rewards from commercialisation on the pattern of research. We build a simple repeated model of a researcher capable to obtain innovative ideas. We analyse how academic and market incentives affect the allocation of the researcher’s time between research and development. We argue, however, that technology transfer objectives also affect the choice of research projects. Although commercialisation incentives reduce the time spent in research, they might also induce researchers to conduct research that is more basic in nature, contrary to what the “skewing problem” would presage. Monetary rewards induce a more intensive search for (ex-post) path-breaking innovations, which are more likely to be generated through (ex-ante) basic research programs. These results are shown to hold even if development delays publication.

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Publisher Info
Paper provided by Department of Economics, City University, London in its series City University Economics Discussion Papers with number 08/13.

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Length: 28 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:cty:dpaper:0813

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Related research
Keywords: Faculty behaviour; basic vs. applied research;

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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  1. Jerry G. Thursby & Marie C. Thursby, 2000. "Who is Selling the Ivory Tower? Sources of Growth in University Licensing," NBER Working Papers 7718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Henderson, R. & Jaffe, A.B.: Tratenberg, M., 1995. "Universities as a Source of Commercial Technology: A Detailed Analysis of University Patenting 1965-1988," Papers 09-95, Tel Aviv.
    Other versions:
  3. Mowery, David C. & Ziedonis, Arvids A., 2002. "Academic patent quality and quantity before and after the Bayh-Dole act in the United States," Research Policy, Elsevier, vol. 31(3), pages 399-418, March. [Downloadable!] (restricted)
  4. Richard Jensen & Marie Thursby, 2001. "Proofs and Prototypes for Sale: The Licensing of University Inventions," American Economic Review, American Economic Association, vol. 91(1), pages 240-259, March. [Downloadable!] (restricted)
  5. Benjamin F. Jones, 2005. "Age and Great Invention," NBER Working Papers 11359, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Debackere, Koenraad & Veugelers, Reinhilde, 2005. "The role of academic technology transfer organizations in improving industry science links," Research Policy, Elsevier, vol. 34(3), pages 321-342, April. [Downloadable!] (restricted)
  7. Paula Stephan & Shiferaw Gurmu & Albert Sumell & Grant Black, 2007. "Who'S Patenting In The University? Evidence From The Survey Of Doctorate Recipients," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 16(2), pages 71-99. [Downloadable!] (restricted)
  8. Nancy T. Gallini & Brian D. Wright, 1990. "Technology Transfer under Asymmetric Information," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 147-160, Spring. [Downloadable!] (restricted)
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  10. Lach, Saul & Schankerman, Mark, 2003. "Incentives and Invention in Universities," CEPR Discussion Papers 3916, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  11. McMillan, G. Steven & Narin, Francis & Deeds, David L., 2000. "An analysis of the critical role of public science in innovation: the case of biotechnology," Research Policy, Elsevier, vol. 29(1), pages 1-8, January. [Downloadable!] (restricted)
  12. Geuna, Aldo & Nesta, Lionel J.J., 2006. "University patenting and its effects on academic research: The emerging European evidence," Research Policy, Elsevier, vol. 35(6), pages 790-807, July. [Downloadable!] (restricted)
  13. Calderini, Mario & Franzoni, Chiara & Vezzulli, Andrea, 2007. "If star scientists do not patent: The effect of productivity, basicness and impact on the decision to patent in the academic world," Research Policy, Elsevier, vol. 36(3), pages 303-319, April. [Downloadable!] (restricted)
  14. Murray, Fiona & Stern, Scott, 2007. "Do formal intellectual property rights hinder the free flow of scientific knowledge?: An empirical test of the anti-commons hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 63(4), pages 648-687, August. [Downloadable!] (restricted)
  15. Jerry Thursby & Marie Thursby, 2005. "Gender Patterns of Research and Licensing Activity of Science and Engineering Faculty," The Journal of Technology Transfer, Springer, vol. 30(4), pages 343-353, October. [Downloadable!] (restricted)
  16. Mowery, David C. & Nelson, Richard R. & Sampat, Bhaven N. & Ziedonis, Arvids A., 2001. "The growth of patenting and licensing by U.S. universities: an assessment of the effects of the Bayh-Dole act of 1980," Research Policy, Elsevier, vol. 30(1), pages 99-119, January. [Downloadable!] (restricted)
  17. InÉs Macho-Stadler & David Pérez-Castrillo & Reinhilde Veugelers, 2008. "Designing Contracts for University Spin-offs," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 17(1), pages 185-218, 03. [Downloadable!] (restricted)
  18. Dr. Peter Kenning & Hilke Plassmann, 2004. "NeuroEconomics," Experimental 0412005, EconWPA. [Downloadable!]
  19. Jensen, Richard A. & Thursby, Jerry G. & Thursby, Marie C., 2003. "Disclosure and licensing of University inventions: 'The best we can do with the s**t we get to work with'," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1271-1300, November. [Downloadable!] (restricted)
  20. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297. [Downloadable!] (restricted)
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