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Innovation: Market Failures and Public Policies

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  • Kevin A. Bryan
  • Heidi L. Williams

Abstract

This is an invited chapter for the forthcoming Volume 4 of the Handbook of Industrial Organization. We summarize the state of the literature on the economics of innovation and highlight open policy questions. We first articulate the key market failures in markets for innovation, and then discuss how both scientific norms and market-oriented policies help overcome those market failures. We close by discussing recent work on the diffusion of inventions as well as on the links between innovation and inequality.

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  • Kevin A. Bryan & Heidi L. Williams, 2021. "Innovation: Market Failures and Public Policies," NBER Working Papers 29173, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29173
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    1. Obschonka, Martin & Tavassoli, Sam & Rentfrow, P. Jason & Potter, Jeff & Gosling, Samuel D., 2023. "Innovation and inter-city knowledge spillovers: Social, geographical, and technological connectedness and psychological openness," Research Policy, Elsevier, vol. 52(8).
    2. Andreas Teichgraeber & John Van Reenen, 2022. "A policy toolkit to increase research and innovation in the European Union," POID Working Papers 025, Centre for Economic Performance, LSE.
    3. Fehder, Daniel & Teodoridis, Florenta & Raffiee, Joseph & Lu, Jino, 2024. "The partisanship of American inventors," Research Policy, Elsevier, vol. 53(7).
    4. Christoph Carnehl & Marco Ottaviani & Justus Preusser, 2024. "Designing Scientific Grants," Papers 2410.12356, arXiv.org.
    5. Chiappinelli, Olga & Giuffrida, Leonardo M. & Spagnolo, Giancarlo, 2023. "Public procurement as an innovation policy: Where do we stand?," ZEW Discussion Papers 23-002, ZEW - Leibniz Centre for European Economic Research.
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    7. Joshua S. Gans, 2023. "Artificial intelligence adoption in a monopoly market," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1098-1106, March.

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    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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