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Inducement Prizes and Innovation

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Author Info

  • Brunt, Liam

    ()
    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Lerner, Josh

    (Harvard Business School)

  • Nicholas, Tom

    (Harvard Business School)

Registered author(s):

    Abstract

    We examine the effect of prizes on innovation using data on awards for technological development offered by the Royal Agricultural Society of England at annual competitions between 1839 and 1939. We find large effects of the prizes on competitive entry and we also detect an impact of the prizes on the quality of contemporaneous patents, especially when prize categories were set by a strict rotation scheme, thereby mitigating the potentially confounding effect that they targeted only “hot” technology sectors. Prizes encouraged competition and medals were more important than monetary awards. The boost to innovation we observe cannot be explained by the re-direction of existing inventive activity.

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    Bibliographic Info

    Paper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 25/2011.

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    Length: 45 pages
    Date of creation: 15 Dec 2011
    Date of revision:
    Handle: RePEc:hhs:nhheco:2011_025

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    Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
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    Related research

    Keywords: Awards; Patents; Contests.;

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    References

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    1. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
    2. Kenneth L. Sokoloff, 1988. "Inventive Activity in Early Industrial America: Evidence From Patent Records, 1790 - 1846," NBER Working Papers 2707, National Bureau of Economic Research, Inc.
    3. Michael Kremer & Heidi Williams, 2010. "Incentivizing Innovation: Adding to the Tool Kit," NBER Chapters, in: Innovation Policy and the Economy, Volume 10, pages 1-17 National Bureau of Economic Research, Inc.
    4. Nicholas Crafts, 2003. "Steam as a general purpose technology: a growth accounting perspective," Economic History Working Papers 22354, London School of Economics and Political Science, Department of Economic History.
    5. Zvi Griliches, 1991. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
    6. Petra Moser, 2003. "How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World Fairs," NBER Working Papers 9909, National Bureau of Economic Research, Inc.
    7. Wesley M Cohen & Richard R Nelson & John P Walsh, 2003. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (Or Not)," Levine's Working Paper Archive 618897000000000624, David K. Levine.
    8. Steven Shavell & Tanguy van Ypersele, 1999. "Rewards versus Intellectual Property Rights," NBER Working Papers 6956, National Bureau of Economic Research, Inc.
    9. Richard Blundell & Rachel Griffith & Frank Windmeijer, 1999. "Individual effects and dynamics in count data models," IFS Working Papers W99/03, Institute for Fiscal Studies.
    10. Petra Moser, 2007. "Why Don't Inventors Patent?," NBER Working Papers 13294, National Bureau of Economic Research, Inc.
    11. Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
    12. Tom Nicholas, 2011. "Independent invention during the rise of the corporate economy in Britain and Japan," Economic History Review, Economic History Society, vol. 64(3), pages 995-1023, 08.
    13. Michele Boldrin & David K Levine, 2008. "Against Intellectual Monopoly," Levine's Bibliography 122247000000002371, UCLA Department of Economics.
    14. Pol Antràs & Hans Joachim Voth, 2000. "Factor prices and productivity growth during the British Industrial Revolution," Economics Working Papers 495, Department of Economics and Business, Universitat Pompeu Fabra.
    15. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
    16. Christine MacLeod & Jennifer Tann & James Andrew & Jeremy Stein, 2003. "Evaluating inventive activity: the cost of nineteenth-century UK patents and the fallibility of renewal data," Economic History Review, Economic History Society, vol. 56(3), pages 537-562, 08.
    17. Michael Kremer, 1998. "Patent Buyouts: A Mechanism For Encouraging Innovation," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1137-1167, November.
    18. repec:fth:harver:1473 is not listed on IDEAS
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Innovation and Prizes
      by Nicholas Gruen in Club Troppo on 2011-12-21 07:31:08
    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:
    1. Felin, Teppo & Zenger, Todd R., 2014. "Closed or open innovation? Problem solving and the governance choice," Research Policy, Elsevier, vol. 43(5), pages 914-925.

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