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Inducement Prizes and Innovation

Author

Listed:
  • Brunt, Liam

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

  • Lerner, Josh

    (Harvard Business School)

  • Nicholas, Tom

    (Harvard Business School)

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.

Suggested Citation

  • Brunt, Liam & Lerner, Josh & Nicholas, Tom, 2011. "Inducement Prizes and Innovation," Discussion Paper Series in Economics 25/2011, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2011_025
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    References listed on IDEAS

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    More about this item

    Keywords

    Awards; Patents; Contests.;
    All these keywords.

    JEL classification:

    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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