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Intellectual Property: When Is It the Best Incentive System?

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  • Nancy Gallini and Suzanne Scotchmer.

Abstract

Our objective in this paper is to review what economists have said about incentive schemes to promote R&D, including intellectual property. While we focus on environments in which other forms of protection are not available, we note that other protections can obviate the need for any formal reward system. In Section II, we compare intellectual property to alternative incentive schemes. In Section III we review optimal design issues for intellectual property, especially the question of patent breadth, and in Section IV we turn to the special problems that arise when innovation is cumulative. In Section V, we summarize the arguments for and against intellectual property. We comment on whether the design recommendations of economists can actually be implemented, and argue that IP regimes should be designed so that the subject matter of each one has relatively homogeneous needs for protection.

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  • Nancy Gallini and Suzanne Scotchmer., 2001. "Intellectual Property: When Is It the Best Incentive System?," Economics Working Papers E01-303, University of California at Berkeley.
  • Handle: RePEc:ucb:calbwp:e01-303
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    References listed on IDEAS

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    JEL classification:

    • K3 - Law and Economics - - Other Substantive Areas of Law
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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