Take Action

Home | Faculty & Research Overview | Research

Research Details

Competing Inventors and the Incentive to Invent, Industrial and Corporate Change

Abstract

This paper introduces a comprehensive model of the market for inventions that examines how both supply-side competition and demand-side competition affect the incentive to invent. Supply-side competition refers to competition among inventors and demand-side competition refers to competition among producers in the downstream product market. The main results are as follows. Competing inventors have greater average expected returns to invention when the downstream market is competitive than when the downstream product market is monopolistic, so downstream competition increases the incentive to invent. A multi-project monopoly inventor has greater incremental expected returns to invention when the downstream market is competitive than when it is monopolistic, so downstream competition again increases the incentive to invent. On the supply side, competition among inventors generates more R&D projects than a multi-project monopoly inventor, when the demand side of the market for inventions is a competitive. The reason for this result is that when the downstream market is competitive, the average expected returns to invention with competition among inventors are greater than the incremental expected returns to invention with a multi-project monopoly inventor.

Type

Article

Author(s)

Daniel Spulber

Date Published

2013

Citations

Spulber, Daniel. 2013. Competing Inventors and the Incentive to Invent. Industrial and Corporate Change. 22(1): 33-72.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action