Patents as an Incentive to Innovate

Abstract

Abstract This chapter investigates the rationale of patents, their economic role, and the circumstances in which they are the most effective. The utilitarian theory considers patents as an incentive — a policy instrument used by society for encouraging inventions. Patents are a response to the public good nature of knowledge, which makes imitation easier than invention. They are one of the instruments of innovation policy along with grants, prizes, subsidies, universities, and public laboratories. Compared with other instruments, patents are more market friendly, leaving all technical and economic choices to firms and customers; and they restrict the use of knowledge. The evidence so far supports the view that patents are quite effective in encouraging innovation, especially in certain industries like pharmaceuticals or chemicals, and less so in electronics, and have little direct effect in other industries, especially in services.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 10 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.