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The Optimal Life of a Patent

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Abstract

One of the important peculiarities of information is that it is expensive to produce but cheap to reproduce. How does a price system react to this phenomenon? One reaction will be to avoid the production of information altogether. Alternatively, firms may decide to keep their information to themselves. In other cases the price system breaks down into imperfect competition. All three of these laissez-faire reactions are inefficient and it may be argued that it is desirable to impose social controls like a patent system or government control on the market for information. In the present paper we discuss some economic aspects of a patent system.

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  • William D. Nordhaus, 1967. "The Optimal Life of a Patent," Cowles Foundation Discussion Papers 241, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:241
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    1. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    2. Jora R. Minasian, 1962. "The Economics of Research and Development," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 93-142, National Bureau of Economic Research, Inc.
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