Principles and Economics in Patents Prizes Subsidies for New Ideas
The core theory addresses the economic management of nonrivalrous goods (ideas) which face a market failure due to positive externalities and under-supply caused by imitation. To resolve this tension between incentivizing creation and maximizing diffusion, three institutional mechanisms are employed: patents granting temporary monopolies, subsidies for basic research inputs, and prizes rewarding specific problem outputs. This framework establishes the theoretical conditions under which institutions navigate tradeoffs between innovation incentives and societal welfare within microeconomic growth theory.
Principles and Economics in Patents Prizes Subsidies for New Ideas
The core theory addresses the economic management of nonrivalrous goods (ideas) which face a market failure due to positive externalities and under-supply caused by imitation. To resolve this tension…