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Does society prefer small innovation?

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  • Mukherjee, Arijit

Abstract

In this paper we show how the size of innovation can affect the incentive for cooperative R&D and social welfare. When cost difference between large and small innovations is not sufficiently large then social welfare can be more under small innovation compared to large innovation. However, the innovating firm always prefers large innovation.
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Suggested Citation

  • Mukherjee, Arijit, 2003. "Does society prefer small innovation?," Economics Letters, Elsevier, vol. 78(3), pages 301-307, March.
    • Handle: RePEc:eee:ecolet:v:78:y:2003:i:3:p:301-307
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    References listed on IDEAS

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    1. Combs, K. L., 1992. "Cost sharing vs. multiple research projects in cooperative R&D," Economics Letters, Elsevier, vol. 39(3), pages 353-357, July.
    2. Stiglitz, Joseph E, 1981. "Potential Competition May Reduce Welfare," American Economic Review, American Economic Association, vol. 71(2), pages 184-189, May.
    3. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
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    5. Marjit, Sugata, 1991. "Incentives for cooperative and non-cooperative R and D in duopoly," Economics Letters, Elsevier, vol. 37(2), pages 187-191, October.
    6. Lahiri, Sajal & Ono, Yoshiyasu, 1988. "Helping Minor Firms Reduces Welfare," Economic Journal, Royal Economic Society, vol. 98(393), pages 1199-1202, December.
    7. Marjit, Sugata, 1990. "On a non-cooperative theory of technology transfer," Economics Letters, Elsevier, vol. 33(3), pages 293-298, July.
    8. Tandon, Pankaj, 1984. "Innovation, Market Structure, and Welfare," American Economic Review, American Economic Association, vol. 74(3), pages 394-403, June.
    9. Jeroen Hinloopen, 1997. "Subsidizing cooperative and noncooperative R&D in duopoly with spillovers," Journal of Economics, Springer, vol. 66(2), pages 151-175, June.
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    Cited by:

    1. Siddhartha Bandyopadhyay & Arijit Mukherjee, 2014. "R&D Cooperation with Entry," Manchester School, University of Manchester, vol. 82(1), pages 52-70, January.
    2. Arijit Mukherjee, 2013. "Patent pool under endogenous technology choice," Discussion Paper Series 2013_07, Department of Economics, Loughborough University, revised Jul 2013.

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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