TY  - JOUR
AU  - Jensen,Richard A.
AU  - Thursby,Marie C.
TI  - Patent Licensing and the Research University
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10758
PY  - 2004
Y2  - September 2004
UR  - http://www.nber.org/papers/w10758
L1  - http://www.nber.org/papers/w10758.pdf
N1  - Author contact info:
Richard Jensen
Dept. of Economics 
University of Notre Dame
434 Flanner Hall
Notre Dame, IN 46556
E-Mail: richard.jensen.24@nd.edu

Marie C. Thursby
College of Management
Georgia Institute of Technology
800 West Peachtree Street, NW
Atlanta, GA 30308-1149
Tel: 404/894-6249
Fax: 404/385-4894
E-Mail: marie.thursby@mgt.gatech.edu
AB  - We construct a dynamic model of university research that allows us to examine recent concerns that financial incentives associated with university patent licensing are detrimental to the traditional mission of US research universities. We assume a principal-agent framework in which the university administration is the principal and a faculty researcher is the agent. Whether or not the researcher remains in the university, and if so her choice of the amount of time to spend on basic and applied research, is complicated by the fact that she earns license income and prestige both inside and outside the university. Thus in contrast to usual principal agent models the participation constraint is endogenous. This, plus the fact that current research affects future knowledge stocks, allows us to show that it is far from obvious that licensing will damage basic research and education.
ER  -