Conclusions

The study set out to investigate performance and behavioral properties of three design mechanisms (institutions) exchanging contracts on patents. The performance was tested for different levels of patent strength, forming a 3 × 2 design. Key findings are summarized in this chapter. The most important appears to be that Innovators are willing to pay the blocking value of a patent as a fixed fee and remaining investment value in the royalty when a linear contract is negotiated. This suggests that competitive demand-side bidding shifts the risks away from the Inventor, making inventing less risky (and perhaps more profitable), resulting in deviation of additional funds for this activity from other investments (such as innovation), creating a more competitive market in technology (making new technology potentially more affordable) and a basis for continued growth in technology (knowledge) and economic development. This result is in support of the proposed informal theory, treating a patent’s blocking value as insurance (for which a fixed fee can be paid as a distribution of risk of loss of current market access can more easily be assessed than gaining new market access). The two-dimensional price signal appears also to be sufficient to direct attention to high-value technology areas, both for blocking and investing use. The willingness to search for new technology appears to be dependent to the institutional design, motivated by loss aversion. The conclusions are summarized under main themes and a discussion on the dynamics of the patent system follows. Finally, a list of future studies are suggested, building on the model presented in Chap. 2 and new hypotheses raised from the two experiments presented in Chaps. 3 and 4. Initial policy propositions are discussed in Chap. 6 to address both incentive-compatible technology use and willingness to search.