We have already developed on this blog the relationship between competition and innovation (see here and here). This relationship goes both ways. On the one hand, competition affects innovation insofar as the firms’ incentives to innovate depend (in a complex way) on the market structure (i.e., the number of firms on the market, the way they compete, the type […]
Tag Archives | innovation
A primer on cumulative innovations
By 21 October 2014 0
(This post aims at digging the concept of cumulative innovation. It is based on Section 19.3 of Belleflamme and Peitz, 2010). Innovations are rarely produced in complete isolation. In many complex industries (such as biotechnologies, information technologies, telecommunications, electronics and software), innovations are typically the result of a cumulative process. For the sake of the […]
The smartphone patent wars: nothing really surprising…
By 28 November 2013 42
(This is an updated and slightly modified version of this post, published on April 25, 2012.) In April 2012, Lucy Koh, a US District Court Judge, tried to force a truce on one of the fiercest fronts of what is now commonly known as the “Smartphone Patent Wars”. She ordered Tim Cook and Choi Gee-Sung, […]
Markets for technologies: do they really work?
By 6 November 2013 42
It is widely agreed that one of the main economic roles of IP law is to create exclusive rights: exclusivity allows innovators to appropriate the returns from their invention and it is the prospect of such returns that gives them the incentives to engage in innovative activities in the first place. It is important to stress […]
Is R&D cooperation a steppingstone to collusion?
By 3 November 2013 40
In 2010, the European Commission has revised its rules for the assessment of co-operation agreements between competitors. Some of these so-called “horizontal agreements” have the potential to reduce competition (and thus harm consumers); it is certainly so when the agreements involve price fixing or limiting production; such agreements are clearly prohibited. On the other hand, […]
Mixing patents and trade secrets for complex innovations
By 9 October 2013 54
In our latest working paper, Francis Bloch and myself analyze the optimal protection strategy for an innovator of a complex innovation who faces the risk of imitation by a competitor. Complex innovations A “complex innovation” is an innovation that can be fragmented into a set of sub-innovations. Although the possibility exists to patent each sub-innovation, innovators […]
Fixing the software patent problem
By 3 October 2013 46
In an article published the New York Times on October 7, 2012, Charles Duhigg and Steve Lohr give a critical view of the current state of the US patent system: Patents are vitally important to protecting intellectual property. Plenty of creativity occurs within the technology industry, and without patents, executives say they could never justify spending fortunes on […]
The economics of copyright protection
By 2 October 2013 54
A few weeks ago (September 14, 2013), the blog American Thinker published quite a vocal piece, entitled “Copyright Strangulation”, condemning the current scope and length of the US copyright law. According to the author, Mike Konrad, Copyright law in America gives individuals, and corporations, a paralyzing stranglehold on our culture. Though its proponents claim that it […]
How entrepreneurial should the state be?
By 24 September 2013 38
In a chapter that I wrote in 2008 for the book “Intellectual Property and the Theories of Justice” (edited by A. Gosseries, A. Marciano and A. Strowel), I summarize how economists generally explain that the state has a role in promoting innovation. The problem with activities generating information or knowledge is that they suffer from […]
Innovation and economic growth
By 23 September 2013 12
The central role that innovation plays in driving economic growth is well known thanks to the pioneering work of Robert Solow (Nobel Prize Laureate in Economics in 1987). In his seminal 1957 paper, Technical Change and the Aggregate Production Function, Solow described what would later be known as the neoclassical growth model (a.k.a. the Solow–Swan or exogenous growth model). […]
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