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Is there a market for ideas?

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  • Joshua S. Gans
  • Scott Stern

Abstract

This article draws on recent work in market design to evaluate the conditions under which a market for ideas or technology (MfTs) will emerge and operate efficiently. As highlighted by Roth ( 2007 ), effective market design must ensure three basic principles: market thickness, lack of congestion, and market safety. Roth also highlights the importance of dealing with "repugnance." Our analysis identifies the factors that are, in most circumstances, likely to inhibit the allocative efficiency of MfT. We show that key institutional developments such as the development of formalized IP exchanges suggest that effective market design may be possible for some innovation markets. Finally, our analysis suggests that markets for ideas are beset by the "repugnance" problem: from the perspective of market design, Open Science is an institution that places normative value on "free" disclosure and so undermines the ability of ideas producers to earn market-based returns for producing even very valuable "pure" knowledge. Copyright 2010 The Author 2010. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • Joshua S. Gans & Scott Stern, 2010. "Is there a market for ideas?," Industrial and Corporate Change, Oxford University Press, vol. 19(3), pages 805-837, June.
  • Handle: RePEc:oup:indcch:v:19:y:2010:i:3:p:805-837
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    File URL: http://hdl.handle.net/10.1093/icc/dtq023
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    References listed on IDEAS

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    1. Scanlan, Mark, 1998. "Using call-back to demonstrate the discriminatory nature of the proportionate return rule," Telecommunications Policy, Elsevier, pages 913-930.
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    Citations

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    Cited by:

    1. Yoichi Nishihara, 2014. "An Anonymous Buyer of Intangible Property," Journal of Industry, Competition and Trade, Springer, vol. 14(4), pages 511-518, December.
    2. Kani, Masayo & Motohashi, Kazuyuki, 2012. "Understanding the technology market for patents: New insights from a licensing survey of Japanese firms," Research Policy, Elsevier, pages 226-235.
    3. Sofka Wolfgang & Sprutacz Maren, 2016. "RIO Country Report 2015: Germany," JRC Working Papers JRC101181, Joint Research Centre (Seville site).
    4. Sauermann, Henry & Roach, Michael, 2014. "Not all scientists pay to be scientists: PhDs’ preferences for publishing in industrial employment," Research Policy, Elsevier, pages 32-47.
    5. Stefano Comino & Fabio Maria Manenti, 2015. "Intellectual Property and Innovation in Information and Communication Technology (ICT)," JRC Working Papers JRC97541, Joint Research Centre (Seville site).
    6. repec:eee:ecanpo:v:54:y:2017:i:c:p:96-104 is not listed on IDEAS
    7. de Rassenfosse, Gaétan & Palangkaraya, Alfons & Webster, Elizabeth, 2016. "Why do patents facilitate trade in technology? Testing the disclosure and appropriation effects," Research Policy, Elsevier, pages 1326-1336.
    8. Mueller-Langer, Frank & Andreoli-Versbach, Patrick, 2014. "Open Access to Research Data: Strategic Delay and the Ambiguous Welfare Effects of Mandatory Data Disclosure," Discussion Papers in Economics 21037, University of Munich, Department of Economics.
    9. Dushnitsky, Gary & Klueter, Thomas, 2017. "Which industries are served by online marketplaces for technology?," Research Policy, Elsevier, pages 651-666.
    10. Andreoli-Versbach, Patrick & Mueller-Langer, Frank, 2014. "Open access to data: An ideal professed but not practised," Research Policy, Elsevier, pages 1621-1633.
    11. Ufuk Akcigit & Murat Alp Celik & Jeremy Greenwood, 2016. "Buy, Keep, or Sell: Economic Growth and the Market for Ideas," Econometrica, Econometric Society, vol. 84, pages 943-984, May.
    12. Stefano Comino & Fabio M. Manenti & NIkolaus Thumm, 2017. "The Role of Patents in Information and Communication Technologies (ICTs). A survey of the Literature," "Marco Fanno" Working Papers 0212, Dipartimento di Scienze Economiche "Marco Fanno".
    13. repec:eee:respol:v:46:y:2017:i:9:p:1644-1654 is not listed on IDEAS
    14. KANI Masayo & MOTOHASHI Kazuyuki, 2013. "Determinants of Demand for Technology in Relationships with Complementary Assets in Japanese Firms," Discussion papers 13033, Research Institute of Economy, Trade and Industry (RIETI).
    15. Jörg Zimmermann & Wolfgang Sofka, 2013. "Knowledge search versus knowledge deployment: How foreignness can be both an asset and a liability for firms," JRC Working Papers on Corporate R&D and Innovation 2013-03, Joint Research Centre (Seville site).
    16. Henry Sauermann & Michael Roach, 2011. "Not All Scientists pay to be Scientists:," DRUID Working Papers 11-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    17. Andrei Hagiu & David B. Yoffie, 2013. "The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators," Journal of Economic Perspectives, American Economic Association, pages 45-66.
    18. Gaetan de Rassenfosse & Alfons Palangkaraya & Elizabeth Webster, 2016. "Why do patents facilitate trade in technology? Testing the disclosure and appropriation effects," Working Papers 2, Chair of Innovation and IP Policy.
    19. Leppälä, Samuli, 2013. "Arrow's paradox and markets for nonproprietary information," Cardiff Economics Working Papers E2013/2, Cardiff University, Cardiff Business School, Economics Section.
    20. Aloña Martiarena, 2012. "Mobility of Skills and Ideas," DRUID Working Papers 12-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    21. Koutroumpis, Pantelis & Leiponen, Aija & Thomas, Llewellyn D W, 2017. "The (Unfulfilled) Potential of Data Marketplaces," ETLA Working Papers 53, The Research Institute of the Finnish Economy.
    22. Gambardella, Alfonso & Giarratana, Marco S., 2013. "General technological capabilities, product market fragmentation, and markets for technology," Research Policy, Elsevier, pages 315-325.
    23. Grimpe, Christoph & Sofka, Wolfgang, 2016. "Complementarities in the search for innovation—Managing markets and relationships," Research Policy, Elsevier, pages 2036-2053.

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