Essays in the economics of innovation incentives.

摘要

Government and nonprofit procurement of targeted research and development often involves projects with several distinct, verifiable stages. In this multi-stage research procurement problem, does a single "end-to-end" incentive procure the optimal level of research effort, or should a sponsor offer intermediate prizes for each stage of research, updating these prizes as stages progress in a "pay-as-you-go" fashion?; In chapter 1, I explore the issue of research and development procurement in a single-agent principal-agent framework. As R&D progresses in complex multistage projects, the researching firm's beliefs about the probability of success in future stages may change over time. The sponsor may also update its beliefs, and these beliefs may evolve asymmetrically to the firm's. I show that the sponsor's choice of prize structure depends upon the sponsor's ability to observe the firm's updated information: while end-to-end prizes benefit the sponsor through higher-powered later-stage incentives, the sponsor may prefer to offer intermediate-stage prizes if the sponsor can update its beliefs and adjust future prizes after each stage. The sponsor may also prefer to offer intermediate-stage prizes when operating under a budget constraint.; In chapter 2, I extend the analysis of the multistage research problem by considering the impact of sponsoring multiple firms or projects simultaneously. I consider two distinct models of research. In an environment where each firm's research progresses from stage to stage at the same rate, the sponsor may prefer pay-as-you-go prizes in order to control the number of projects that are pursued in later stages of research. In an environment where a firm's attempt at research in each stage can take a varying amount of time, the sponsor may prefer pay-as-you-go prizes to provide incentives to a firm that has fallen behind its competitor to continue researching.; Chapter 3 turns away from the procurement of innovation to the market for intellectual property goods; in particular the market for content protected by digital rights management systems. As it becomes cheaper to copy and share digital content, vendors are turning to technical protections such as encryption. With my co-author, Suzanne Scotchmer, I argue that if protection is nevertheless imperfect, this transition will generally lower the prices of content relative to perfect legal enforcement. However, the effect on prices depends on whether the content providers use independent protection standards or a shared one, and if shared, on the governance of the system. Even if a shared system permits content providers to set their prices independently, the equilibrium prices will depend on how the vendors share the costs, and prices may be higher than with perfect legal protection. We show that demand-based cost sharing generally leads to higher prices than revenue-based cost sharing. Users, vendors and the antitrust authorities will typically have different views on what capabilities the DRM system should have. We argue that, when a DRM system is implemented as an industry standard, there is a potential for "collusion through technology."