Patents and Research Investments: Assessing the Empirical Evidence
A well-developed theoretical literature — dating back at least to Nordhaus (1969) — has analyzed optimal patent policy design. We re-present the core trade-off of the Nordhaus model and highlight an empirical question which emerges from the Nordhaus framework as a key input into optimal patent policy design: namely, what is the elasticity of R&D investment with respect to the patent term? We then review the — surprisingly small — body of empirical evidence that has been developed on this question over the nearly half century since the publication of Nordhaus's book.
Document Object Identifier (DOI): 10.3386/w21889
Published: Eric Budish & Benjamin N. Roin & Heidi Williams, 2016. "Patents and Research Investments: Assessing the Empirical Evidence," American Economic Review, vol 106(5), pages 183-187. citation courtesy of
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