IDEAS home Printed from https://ideas.repec.org/p/hhs/cesisp/0231.html
   My bibliography  Save this paper

COORDINATING INVENTIVE AND INNOVATIVE DECISIONS THROUGH MARKETS WITH PRICES: A Experimental Study of Patent Markets with Transparent Prices

Author

Listed:
  • Ullberg, Eskil

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

The patent system makes organized markets in patents with transparent prices possible. Such prices are here investigated as “signals” for inventors and innovators alike ofv aluable “technology areas”, in an experimental study. They inform decisions of specialized “firms” on allocation of resources for invention given a search space of induced technology values. The traditional hierarchical model of coordinating invention and innovation in a vertically integrated firm is replaced by coordination of these activities among specialized firms through a market with prices. The experimental study builds on a study focusing on price mechanisms with exogenous technology values to a study of an economic environment with “endogenous” technology values. The results suggest that coordination clearly takes place but differs considerably between the institutions and patent validity tested (a 3 x 2 design). As with the price study, demand-side bidding in both dimensions of the linear contract appears to yield the broadest search scope, and thus the best chances for the allocation of resources for invention. Multiple end-states are observed, especially for institutions with less demand-side bidding, indicating imprecise price signals for institutions similar to today’s personal exchange. Coordination with prices appears to increase the dynamic gains of the patent system through price information to reduce or better inform about the risk in investments in new technology.

Suggested Citation

  • Ullberg, Eskil, 2010. "COORDINATING INVENTIVE AND INNOVATIVE DECISIONS THROUGH MARKETS WITH PRICES: A Experimental Study of Patent Markets with Transparent Prices," Working Paper Series in Economics and Institutions of Innovation 231, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0231
    as

    Download full text from publisher

    File URL: https://static.sys.kth.se/itm/wp/cesis/cesiswp231.pdf
    Download Restriction: no

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Engel, Christoph & Kleine, Marco, 2015. "Who is afraid of pirates? An experiment on the deterrence of innovation by imitation," Research Policy, Elsevier, vol. 44(1), pages 20-33.

    More about this item

    Keywords

    patents; intellectual property; trade; licensing; experiments;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:cesisp:0231. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vardan Hovsepyan). General contact details of provider: http://edirc.repec.org/data/cekthse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.