Econ 483_Lecture 6_Prizes_Contests

the inventor will not agree unless the prize is at

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ion if the inventor has the option to choose IP protection instead. ) The inventor will not agree unless the prize is at least as large as the patent value. ) By accepting a prize, the innovator renounces the patent right & puts the innovation in the public domain. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Prizes: examples Inventors of photography: L. Daguerre & I. Niepce They received pensions in exchange for revealing the secrets of the process. They chose the prize, apparently judging the value of the prize to be grater than the patent protection. Inventor of celluloid: J. Hyatt He realized that his invention has wide applicability. He chose patent protection, apparently judging the value of the patent to be greater than the prize. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Prizes: other examples Prize for a means to preserve food to feed Napoleon’ vast armies, 1795 s N. Appert, 1810; his technique involved heat sterilization of food packed in bottles Prize to improve the steam engine; Porter, 1994 Prize for demonstrating that Maxwell’ equations of electromagnetism were s correct; by the Berlin Academy, 1879 The feat was accomplished by H. Hertz, long after the prize expired. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Prizes The optimal size of the prize: If costs are expected to be much lower than the innovation’ value, a prize s should also be much lower than this value. A prize should be tailored to the number of participants that the sponsor wishes to attract. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Prizes If ideas are not scarce, the reward must be such that the duplication problem must be avoided. If ideas are scarce, the size of the prize should balance the possibility of giving up the innovation (when the...
View Full Document

Ask a homework question - tutors are online