IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/5022.html
   My bibliography  Save this paper

Cumulative Innovation, Sampling and the Hold-Up Problem

Author

Listed:
  • Pollock, Rufus

Abstract

With cumulative innovation and imperfect information about the value of innovations, intellectual property rights can result in hold-up and therefore it may be better not to have them. Extending the basic cumulative innovation model to include `sampling' by second-stage firms, we find that the lower the cost of sampling, or the larger the differential between high and low value second-stage innovations, the more likely it is that a regime without intellectual property rights will be preferable. Thus, technological change which reduces the cost of encountering and trialling new `ideas' implies a reduction in the socially optimal level of rights such as patent and copyright.

Suggested Citation

  • Pollock, Rufus, 2006. "Cumulative Innovation, Sampling and the Hold-Up Problem," MPRA Paper 5022, University Library of Munich, Germany, revised 10 Aug 2007.
    • Handle: RePEc:pra:mprapa:5022
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/5022/1/MPRA_paper_5022.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jerry R. Green & Suzanne Scotchmer, 1995. "On the Division of Profit in Sequential Innovation," RAND Journal of Economics, The RAND Corporation, vol. 26(1), pages 20-33, Spring.
    2. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
    3. James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Innovation," NajEcon Working Paper Reviews 321307000000000021, www.najecon.org.
    4. Carmen Matutes & Pierre Regibeau & Katharine Rockett, 1996. "Optimal Patent Design and the Diffusion of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 60-83, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. MARTENS Bertin & DUCH BROWN Nestor, 2020. "The economics of Business-to-Government data sharing," JRC Working Papers on Digital Economy 2020-04, Joint Research Centre.
    2. Pollock, Rufus, 2006. "Innovation and Imitation with and without Intellectual Property Rights," MPRA Paper 5025, University Library of Munich, Germany, revised 17 Jul 2007.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pollock, R., 2008. "Cumulative Innovation, Experimentation and the Hold-Up Problem," Cambridge Working Papers in Economics 0817, Faculty of Economics, University of Cambridge.
    2. Grönqvist, Charlotta, 2009. "Empirical studies on the private value of Finnish patents," Bank of Finland Scientific Monographs, Bank of Finland, volume 0, number sm2009_041, July.
    3. Mabrouki, Mohamed, 2018. "Le brevet : un instrument efficace pour promouvoir l’innovation au profit de la croissance ou un mal nécessaire ? [Patent: an effective instrument to promote innovation for the benefit of growth or," MPRA Paper 85752, University Library of Munich, Germany.
    4. Chih‐Hai Yang, 2008. "Effects Of Strengthening Intellectual Property Rights In Newly Industrialized Economies: Evidence From Taiwan’S 1994 Patent Reform," Contemporary Economic Policy, Western Economic Association International, vol. 26(2), pages 259-275, April.
    5. Zoltán J. Ács & Mark Sanders, 2015. "Patents, knowledge spillovers, and entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 11, pages 195-212, Edward Elgar Publishing.
    6. Rockett, Katharine, 2010. "Property Rights and Invention," 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 315-380, Elsevier.
    7. Reitzig, Markus, 2003. "What determines patent value?: Insights from the semiconductor industry," Research Policy, Elsevier, vol. 32(1), pages 13-26, January.
    8. Markus Reitzig, 2004. "The private values of 'thickets' and 'fences': towards an updated picture of the use of patents across industries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(5), pages 457-476.
    9. Giacomo A. M. Ponzetto, 2008. "Intellectual property rights and efficient firm organization," Economics Working Papers 1254, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2014.
    10. Régibeau, P & Rockett, K, 2004. "The Relationship Between Intellectual Property Law and Competition Law: An Economic Approach," Economics Discussion Papers 2851, University of Essex, Department of Economics.
    11. Kou Zonglai & Zhang Jian, 2007. "Endogenous licensing in cumulative innovation," Psychometrika, Springer;The Psychometric Society, vol. 2(3), pages 424-457, July.
    12. Sakakibara, Mariko & Branstetter, Lee, 2001. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 77-100, Spring.
    13. Yang, Xuebing, 2013. "Horizontal inventive step and international protection of intellectual property," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 338-355.
    14. Reiko Aoki & Jin‐Li Hu, 1999. "Licensing vs. Litigation: The Effect of the Legal System on Incentives to Innovate," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(1), pages 133-160, March.
    15. Wright, Brian D. & Pardey, Philip G. & Nottenburg, Carol & Koo, Bonwoo, 2007. "Agricultural Innovation: Investments and Incentives," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 48, pages 2533-2603, Elsevier.
    16. Chen, Yongmin & Pan, Shiyuan & Zhang, Tianle, 2014. "(When) Do stronger patents increase continual innovation?," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 115-124.
    17. John Laitner & Dmitriy Stolyarov, 2013. "Derivative Ideas And The Value Of Intangible Assets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(1), pages 59-95, February.
    18. Aoki, R. & Spiegel, Y., 1998. "Public Disclosure of Patent Applications, R&D, and Welfare," Papers 30-98, Tel Aviv.
    19. Grönqvist, Charlotta, 2009. "Empirical studies on the private value of Finnish patents," Scientific Monographs, Bank of Finland, number 2009_041.
    20. Langinier, Corinne & Moschini, GianCarlo, 2002. "Economics of Patents: An Overview, The," Staff General Research Papers Archive 2061, Iowa State University, Department of Economics.

    More about this item

    Keywords

    Cumulative Innovation; Hold-Up; Sampling; Intellectual Property;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • K3 - Law and Economics - - Other Substantive Areas of Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:5022. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.