Prizes, Patents, and Technology Procurement: A Proposed Analytical Framework
Policy and entrepreneurial communities are increasingly promoting innovation by using prizes but their distinguishing features remain inadequately understood. Models of patents treat winning a patent as winning a prize; other models distinguish prizes primarily as public lump-sum (re)purchase of a patent. We examine advantages of prizes based on the ability to customize rewards, manage competition, generate publicity, and cover achievements otherwise not patentable. We compare prizes to patents using a model based first on whether the procuring party knows its needs and technology, its needs but not its technology, or neither. The second factor is the risk that the investment in research will prove profitable, where the greater the risk, the more the procuring party should share in it through ex ante cost coverage or payment commitment. The model suggests a framework that may be extended to cover other means of technology inducement, including grants, customized procurement, and off-the-shelf purchase.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Giebe, Thomas, 2014.
"Innovation contests with entry auction,"
Journal of Mathematical Economics,
Elsevier, vol. 55(C), pages 165-176.
- Giebe, Thomas, 2010. "Innovation Contests with Entry Auction," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 307, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
- Baye, Michael R. & Hoppe, Heidrun C., 2003. "The strategic equivalence of rent-seeking, innovation, and patent-race games," Games and Economic Behavior, Elsevier, vol. 44(2), pages 217-226, August.
- Encaoua, David & Guellec, Dominique & Martinez, Catalina, 2006.
"Patent systems for encouraging innovation: Lessons from economic analysis,"
Elsevier, vol. 35(9), pages 1423-1440, November.
- David Encaoua & Dominique Guellec & Catalina Martínez, 2006. "Patent Systems for Encouraging Innovation: Lessons from Economic Analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00177614, HAL.
- Wright, Brian Davern, 1983. "The Economics of Invention Incentives: Patents, Prizes, and Research Contracts," American Economic Review, American Economic Association, vol. 73(4), pages 691-707, September.
- Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
- Newell, Richard & Wilson, Nathan, 2005. "Technology Prizes for Climate Change Mitigation," Discussion Papers dp-05-33, Resources For the Future.
- Julien Pénin, 2003.
"Patents versus ex-post rewards: a new look,"
Working Papers of BETA
2003-09, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Julien Pénin, 2003. "Patents versus ex-post rewards : a new look," Cahiers de recherche du Département des sciences économiques, UQAM 20-19, Université du Québec à Montréal, Département des sciences économiques.
- Barry J. Nalebuff & Joseph E. Stiglitz, 1983. "Prices and Incentives: Towards a General Theory of Compensation and Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 21-43, Spring.
- Mowery, David C. & Nelson, Richard R. & Martin, Ben R., 2010. "Technology policy and global warming: Why new policy models are needed (or why putting new wine in old bottles won't work)," Research Policy, Elsevier, vol. 39(8), pages 1011-1023, October.
- Shavell, Steven & van Ypersele, Tanguy, 2001.
"Rewards versus Intellectual Property Rights,"
Journal of Law and Economics,
University of Chicago Press, vol. 44(2), pages 525-47, October.
- SHAVELL, Steven & VAN YPERSELE, Tanguy, . "Rewards versus intellectual property rights," CORE Discussion Papers RP -1597, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Steven Shavell & Tanguy van Ypersele, 1999. "Rewards versus Intellectual Property Rights," NBER Working Papers 6956, National Bureau of Economic Research, Inc.
- Tirole, Jean & Weyl, Glen, 2010. "Materialistic Genius and Market Power: Uncovering the best innovations," IDEI Working Papers 629, Institut d'Économie Industrielle (IDEI), Toulouse.
- Parry, Ian W.H. & Williams, Roberton C., 2011. "Moving U.S. Climate Policy Forward: Are Carbon Taxes the Only Good Alternative?," Discussion Papers dp-11-02, Resources For the Future.
- repec:hal:journl:halshs-00177614 is not listed on IDEAS
- Rogerson, William P, 1989. "Profit Regulation of Defense Contractors and Prizes for Innovation," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1284-1305, December.
- Michael Kremer, 1998. "Patent Buyouts: A Mechanism For Encouraging Innovation," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1137-1167, November.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-11-21-rev. 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: (Webmaster)
If references are entirely missing, you can add them using this form.