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Rewards versus intellectual property rights

Author

Listed:
  • Shavell, S.
  • van Ypersele de Strihou, T.P.M.C.

    (Tilburg University, Center For Economic Research)

Abstract

This paper compares reward systems to intellectual property rights (patents and copyrights). Under a reward system, innovators are paid for innovations directly by the government (possibly on the basis of sales), and innovations pass immediately into the public domain. Thus, reward systems engender incentives to innovate without creating the monopoly power of intellectual property rights. But a principal difficulty with rewards is the information required for their determination. We conclude in our model that intellectual property rights do not possess a fundamental social advantage over reward systems and that an optional reward system--under which innovators choose between rewards and intellectual property rights--is superior to intellectual property rights. Copyright 2001 by the University of Chicago.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Shavell, S. & van Ypersele de Strihou, T.P.M.C., 1999. "Rewards versus intellectual property rights," Discussion Paper 1999-26, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:86de81cf-8f39-441e-bcf2-fafa6faea38d
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    File URL: https://pure.uvt.nl/portal/files/1150068/SSYT5616776.pdf
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    References listed on IDEAS

    as
    1. Machlup, Fritz & Penrose, Edith, 1950. "The Patent Controversy in the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 10(01), pages 1-29, May.
    2. Suzanne Scotchmer, 1999. "On the Optimality of the Patent Renewal System," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 181-196, Summer.
    3. Michael Kremer, 1997. "Patent Buy-Outs: A Mechanism for Encouraging Innovation," NBER Working Papers 6304, National Bureau of Economic Research, Inc.
    4. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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