Towards Empirical Estimation of the Externalities of Innovation. Volume I. Executive Summary

摘要

The report analyzes three principal sources of divergencies between social and private returns from innovation, or types of externalities: the public goods aspect of innovation, the riskiness of investment in innovation, and the fact that innovation tends to be a facilitator of further invention. A model is formulated that might be used to eventually estimate the extent of resource misallocation due to these sources of divergencies between private and social benefits and costs. A related issue considered is the determination of an optimal patent period. It involves the balancing of the social cost due to the monopoly and the increased amount of innovation due to a lengthening of the patent form. The report provides an explicit control theoretic model describing the choice of the optimal patent period. Finally, by means of computer simulation, the study compares the social benefits from privately financed innovation induced by a patent term of optimal duration with the benefits from government financed innovation with unrestricted availability of the innovation.