Prof. Dr. Catherine Roux Faculty of Business and Economics Profiles & Affiliations OverviewResearch Publications Projects & Collaborations Projects & Collaborations OverviewResearch Publications Projects & Collaborations Profiles & Affiliations Projects & Collaborations 2 foundShow per page10 10 20 50 FV-127 | Mergers Eliminating Mavericks: Experimental Evidence on Beliefs and Collusion Research Project | 1 Project MembersImported from Grants Tool 4723823 Racing with Private Information: Can Patents have an Adverse Effect on Incentives to Innovate? Research Project | 2 Project MembersDuring the last decades, industrialized economies have witnessed a proliferation of patenting activity while innovation, in terms of factor productivity or R&D expenditure, has failed to show a comparable upward trend. Anecdotal evidence even suggests that some industries were most innovative during periods of relatively weak patent protection (e.g., computer and software). As patents provide incentives for innovation by protecting innovators from imitation, the missing link between patenting activity and productivity growth has spurred a policy debate, known as the 'patent puzzle', whose relevance becomes most apparent in times of crisis when innovation represents an imminent need (e.g., Covid-19). A prominent explanation of the patent puzzle is that excessive patenting may inhibit follow-up innovation. However, the patent puzzle has been found to persist even when the focus is on basic R&D. The aim of this project is to complement the existing rationale by the insight that patenting may not only inhibit the use of a patented innovation ex post but may also have an adverse effect on the incentives to compete for such an innovation ex ante. The project's starting point is the observation that, while a firm's first-mover advantage from an innovation can be substantial even in the absence of a patent, the actual size of the corresponding rent is rather unpredictable due to the uncertainty about the time that competitors require for catching up. By specifying the exact duration during which monopoly power can be enjoyed, patents thus improve firms' information about the value of a contested innovation. Yet, recent advances in contest theory suggest that improving the contestants' information can have an adverse effect on their incentives to exert efforts. Motivated by this finding, the first part of this project will therefore investigate theoretically, within the similar but differing setting of an innovation race, how private information about the value of an innovation influences R&D expenditures and the time it takes to innovate. While a patent may harm firms' incentives to invest in R&D via its effect on information, it improves incentives by increasing the expected value of an innovation, making the overall effect of patent protection on innovation an inherently empirical question. In the second part of this project, we propose an experimental study of the effects of patents on innovation. The experimental design will allow for a clear separation between a patent's informational effect and the standard effect of increasing the value of innovation. It is our hope that the synthesis of theory and experiment will serve as a foundation for subsequent policy-oriented research, aiming to promote firms' incentives to innovate. 1 1 OverviewResearch Publications Projects & Collaborations
Projects & Collaborations 2 foundShow per page10 10 20 50 FV-127 | Mergers Eliminating Mavericks: Experimental Evidence on Beliefs and Collusion Research Project | 1 Project MembersImported from Grants Tool 4723823 Racing with Private Information: Can Patents have an Adverse Effect on Incentives to Innovate? Research Project | 2 Project MembersDuring the last decades, industrialized economies have witnessed a proliferation of patenting activity while innovation, in terms of factor productivity or R&D expenditure, has failed to show a comparable upward trend. Anecdotal evidence even suggests that some industries were most innovative during periods of relatively weak patent protection (e.g., computer and software). As patents provide incentives for innovation by protecting innovators from imitation, the missing link between patenting activity and productivity growth has spurred a policy debate, known as the 'patent puzzle', whose relevance becomes most apparent in times of crisis when innovation represents an imminent need (e.g., Covid-19). A prominent explanation of the patent puzzle is that excessive patenting may inhibit follow-up innovation. However, the patent puzzle has been found to persist even when the focus is on basic R&D. The aim of this project is to complement the existing rationale by the insight that patenting may not only inhibit the use of a patented innovation ex post but may also have an adverse effect on the incentives to compete for such an innovation ex ante. The project's starting point is the observation that, while a firm's first-mover advantage from an innovation can be substantial even in the absence of a patent, the actual size of the corresponding rent is rather unpredictable due to the uncertainty about the time that competitors require for catching up. By specifying the exact duration during which monopoly power can be enjoyed, patents thus improve firms' information about the value of a contested innovation. Yet, recent advances in contest theory suggest that improving the contestants' information can have an adverse effect on their incentives to exert efforts. Motivated by this finding, the first part of this project will therefore investigate theoretically, within the similar but differing setting of an innovation race, how private information about the value of an innovation influences R&D expenditures and the time it takes to innovate. While a patent may harm firms' incentives to invest in R&D via its effect on information, it improves incentives by increasing the expected value of an innovation, making the overall effect of patent protection on innovation an inherently empirical question. In the second part of this project, we propose an experimental study of the effects of patents on innovation. The experimental design will allow for a clear separation between a patent's informational effect and the standard effect of increasing the value of innovation. It is our hope that the synthesis of theory and experiment will serve as a foundation for subsequent policy-oriented research, aiming to promote firms' incentives to innovate. 1 1
FV-127 | Mergers Eliminating Mavericks: Experimental Evidence on Beliefs and Collusion Research Project | 1 Project MembersImported from Grants Tool 4723823
Racing with Private Information: Can Patents have an Adverse Effect on Incentives to Innovate? Research Project | 2 Project MembersDuring the last decades, industrialized economies have witnessed a proliferation of patenting activity while innovation, in terms of factor productivity or R&D expenditure, has failed to show a comparable upward trend. Anecdotal evidence even suggests that some industries were most innovative during periods of relatively weak patent protection (e.g., computer and software). As patents provide incentives for innovation by protecting innovators from imitation, the missing link between patenting activity and productivity growth has spurred a policy debate, known as the 'patent puzzle', whose relevance becomes most apparent in times of crisis when innovation represents an imminent need (e.g., Covid-19). A prominent explanation of the patent puzzle is that excessive patenting may inhibit follow-up innovation. However, the patent puzzle has been found to persist even when the focus is on basic R&D. The aim of this project is to complement the existing rationale by the insight that patenting may not only inhibit the use of a patented innovation ex post but may also have an adverse effect on the incentives to compete for such an innovation ex ante. The project's starting point is the observation that, while a firm's first-mover advantage from an innovation can be substantial even in the absence of a patent, the actual size of the corresponding rent is rather unpredictable due to the uncertainty about the time that competitors require for catching up. By specifying the exact duration during which monopoly power can be enjoyed, patents thus improve firms' information about the value of a contested innovation. Yet, recent advances in contest theory suggest that improving the contestants' information can have an adverse effect on their incentives to exert efforts. Motivated by this finding, the first part of this project will therefore investigate theoretically, within the similar but differing setting of an innovation race, how private information about the value of an innovation influences R&D expenditures and the time it takes to innovate. While a patent may harm firms' incentives to invest in R&D via its effect on information, it improves incentives by increasing the expected value of an innovation, making the overall effect of patent protection on innovation an inherently empirical question. In the second part of this project, we propose an experimental study of the effects of patents on innovation. The experimental design will allow for a clear separation between a patent's informational effect and the standard effect of increasing the value of innovation. It is our hope that the synthesis of theory and experiment will serve as a foundation for subsequent policy-oriented research, aiming to promote firms' incentives to innovate.
