Working Paper: NBER ID: w9903
Authors: Stephen M. Maurer; Suzanne Scotchmer
Abstract: There is growing public interest in alternatives to intellectual property including, but not limited to, prizes and government grants. We argue that there is no single best mechanism for supporting research. Rather, mechanisms can only be compared within specific creative environments. We collect various historical and contemporary examples of alternative incentives, and relate them to models of the creative process. We give an explanation for why federally funded R&D has moved from an intramural activity to largely a grant process. Finally, we observe that much research is supported by a hybrid system of public and private sponsorship, and explain why this makes sense in some circumstances.
Keywords: No keywords provided
JEL Codes: O31; O38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Incentive mechanisms (D47) | Outcomes of R&D investments (O36) |
| Creative environment (O36) | Effectiveness of incentive mechanisms (J33) |
| Public procurement preferred in certain environments (H57) | Lower costs associated with deadweight loss (D61) |
| Shift from intramural R&D to grant process (O38) | Need for flexible funding mechanisms (F35) |
| Hybrid system (public and private sponsorship) (H44) | Effectively address challenges of funding and leveraging expertise (O36) |
| Social value of innovation not appropriable by private firms (O35) | Preference for public procurement (H57) |