Econ 483_Lecture 16_Cumulative innovation

C umulative innovation licensing quality ladder rms

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Unformatted text preview: a Chalioti c A ll rights reserved. C umulative innovation Licensing Quality ladder: …rms create successively better products, each improving on the previous one. successive improvement: no innovator is secure in thinking that her innovation will be the last q0 : the quality of the most recent product in the product line q1 : the quality of a new improved version of the old product ∆: the quality di¤erence; the incremental improvement Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Licensing Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Cumulative innovations A license is an agreement whereby the owner of IP authorizes another party to use this property. - i.e. Survey of the IP Owners Association (Cockburn & Henderson ’ 03): 17.6% of patents in the respondents’patent portfolios where licensed out. 1/8 of the respondents reported that they sometimes initiate technology development in the expectation that returns will be realized solely through licensing rather than through product sales. - Any kind of IP can be licensed; patents, copyrights, trademarks etc Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Licensing IP law rewards innovators by using: length breadth exemptions ! Licensing is an other tool that rewards innovators. Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Licensing Licensing: increases the use of knowledge (bene…t for both innovators & consumers) encourages the creation of alliances between …rms that a¤ect production & pricing decisions (anti-competitive practice; higher prices; loss for consumers) Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Techn...
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This note was uploaded on 03/16/2014 for the course ECON 483 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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