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Knowledge Properties and Economic Policy: A New Look

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This paper explores the full range of effects of knowledge properties and explains how knowledge properties such as transient appropriability, nonexhaustibility and indivisibility do not only have negative effects, but also positive ones. Knowledge externalities help reduce the cost of knowledge and imitation externalities reduce the revenue and profitability of innovations. Their effects need to be considered jointly in a single analytical framework. An analysis of their combined effects questions the scope of application of the “Arrovian postulate” according to which the limited appropriability of knowledge due to its uncontrolled dissemination reduces invention. This ignores spillovers of outside knowledge, which increase invention. These are the two opposing faces of the limited appropriability of knowledge. Policy implications suggest that along with public interventions designed to support the supply of knowledge and to compensate for missing incentives, much attention should be paid to all interventions that favour the dissemination of knowledge and the knowledge connectivity of the system.

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  • Antonelli, Cristiano, 2017. "Knowledge Properties and Economic Policy: A New Look," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201707, University of Turin.
    • Handle: RePEc:uto:labeco:201707
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    1. Cristiano Antonelli, 2009. "The economics of innovation: from the classical legacies to the economics of complexity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(7), pages 611-646.
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    1. The free rider problem – and opportunity: you heard it first at Troppo
      by Nicholas Gruen in Club Troppo on 2017-04-09 15:32:59

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    1. Cristiano Antonelli, 2019. "A reappraisal of the Arrovian postulate and the intellectual property regime: user-specific patents," European Journal of Law and Economics, Springer, vol. 47(3), pages 377-388, June.

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