Patent Pools and the Direction of Innovation - Evidence from the 19th-century Sewing Machine Industry
AbstractPatent pools allow a group of firms to combine their patents as if they were a single firm. Theoretical models predict that pools encourage innovation in pool technologies, albeit at the cost of innovation in substitutes. Empirical evidence is scarce because modern pools are too recent to allow empirical analyses. This article examines data on patents and innovations by new firms for a historical pool in the sewing machine industry (1856-1877) to examine effects on innovation. Contrary to theoretical predictions, this analysis suggests that pools may discourage innovation in pool technologies and shift R&D towards technologically inferior substitutes.
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Date of creation: Nov 2011
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Find related papers by JEL classification:
- D4 - Microeconomics - - Market Structure and Pricing
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
- L4 - Industrial Organization - - Antitrust Issues and Policies
- N61 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: Pre-1913
- N81 - Economic History - - Micro-Business History - - - U.S.; Canada: Pre-1913
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-14 (All new papers)
- NEP-COM-2011-11-14 (Industrial Competition)
- NEP-HIS-2011-11-14 (Business, Economic & Financial History)
- NEP-INO-2011-11-14 (Innovation)
- NEP-IPR-2011-11-14 (Intellectual Property Rights)
- NEP-TID-2011-11-14 (Technology & Industrial Dynamics)
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