TY  - JOUR
AU  - Aghion,Philippe
AU  - Dewatripont,Mathias
AU  - Stein,Jeremy C.
TI  - Academic Freedom, Private-Sector Focus, and the Process of Innovation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11542
PY  - 2005
Y2  - August 2005
UR  - http://www.nber.org/papers/w11542
L1  - http://www.nber.org/papers/w11542.pdf
N1  - Author contact info:
Philippe Aghion
Department of Economics
Harvard University
1805 Cambridge St
Cambridge, MA 02138
Tel: 617/495-6675
Fax: 617/495-4341
E-Mail: paghion@fas.harvard.edu

Mathias Dewatripont
Universite Libre de Bruxelles
E-Mail: mdewat@ulb.ac.be

Jeremy C. Stein
Department of Economics
Harvard University
Littauer 209
Cambridge, MA  02138
Tel: 617/496-6455
Fax: 617/496-7352
E-Mail: jeremy_stein@harvard.edu
M2  - featured in NBER digest on 2005-08-08
AB  - We develop a model that clarifies the respective advantages and disadvantages of academic and private-sector research. Our model assumes full protection of intellectual property rights at all stages of the development process, and hence does not rely on lack of appropriability or spillovers to generate a rationale for academic research. Instead, we focus on control-rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early-stage research. At the same time, the private sector%u2019s ability to direct scientists towards higher-payoff activities makes it more attractive for later-stage research.
ER  -