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'Successes' and 'Failures' in the Markets for Technology

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  • Alfonso Gambardella

Abstract

Market-mediated contracts for technology trade are bound by several transaction costs. This paper argues that as these transaction costs become less severe, markets for technology can help improve three market failures: (i) R&D duplications; (ii) externalities in potentially public R&D outcomes; and (iii) deviations from marginal cost pricing in the downstream product markets. In addition, with larger markets of potential users, the technology suppliers will have incentives to produce more 'general' technologies which span a wider number of firms or industries. Markets for technology also produce new failures. In particular, they induce deviation from marginal cost pricing in the sale of the technology, and they generate externalities associated with complementary R&D and other investments made by the independent buyers and suppliers that operate in them. The paper concludes by discussing policy implications. Copyright 2002, Oxford University Press.

Suggested Citation

  • Alfonso Gambardella, 2002. "'Successes' and 'Failures' in the Markets for Technology," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(1), pages 52-62, Spring.
    • Handle: RePEc:oup:oxford:v:18:y:2002:i:1:p:52-62
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    Cited by:

    1. Tietze, Frank, 2008. "Technology market intermediaries to facilitate external technology exploitation: The case of IP auctions," Working Papers 55, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    2. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    3. Rousselière, Samira & Rousselière, Damien & Ramani, Shyama, 2016. "Innovation Led Alliances: Theory and application to the GM Plant Industry," 149th Seminar, October 27-28, 2016, Rennes, France 244949, European Association of Agricultural Economists.
    4. Bottazzi, Laura, 2009. "The role of venture capital in alleviating financial constraints of innovative firms," EIB Papers 9/2009, European Investment Bank, Economics Department.
    5. Renaud Bellais & Renelle Guichard, 2006. "Defense Innovation, Technology Transfers And Public Policy," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 273-286.
    6. Tietze, Frank, 2010. "A typology of technology market intermediaries," Working Papers 60, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    7. Darcy, Jacques & Krämer-Eis, Helmut & Guellec, Dominique & Debande, Olivier, 2009. "Financing technology transfer," EIB Papers 10/2009, European Investment Bank, Economics Department.
    8. Harhoff, Dietmar, 2009. "The role of patents and licenses in securing external finance for innovation," EIB Papers 11/2009, European Investment Bank, Economics Department.
    9. Bronwyn H. Hall, 2010. "The Financing of Innovative Firms," Review of Economics and Institutions, Università di Perugia, vol. 1(1).
    10. Werner Hölzl, 2007. "Intellectual Property Rights, Innovation and European IPR Policy," Austrian Economic Quarterly, WIFO, vol. 12(1), pages 71-82, May.
    11. Barirani, Ahmad & Beaudry, Catherine & Agard, Bruno, 2017. "Can universities profit from general purpose inventions? The case of Canadian nanotechnology patents," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 271-283.
    12. Jianwei DANG & MOTOHASHI Kazuyuki, 2014. "Get Pennies from Many or a Dollar from One? Multiple contracting in markets for technology," Discussion papers 14006, Research Institute of Economy, Trade and Industry (RIETI).

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