Inventing in the Shadow of the Patent System: Evidence from 19th-Century Patents and Prizes for Technological Innovations

B. Zorina Khan

NBER Working Paper No. 20731
Issued in December 2014
NBER Program(s):Development of the American Economy, Productivity, Innovation, and Entrepreneurship

Such institutions as patent systems cannot be well understood without an assessment of technological creativity in other contexts. Some have argued that prizes might offer superior alternatives to the award of property rights in inventions. Accordingly, this paper offers an empirical comparison of patents in relation to the award of prizes for technological innovation. The data set comprises a sample of patents, as well as exhibits and prizes at annual industrial fairs in Massachusetts over the course of the nineteenth century. The patterns shed light on the factors that influenced how specific inventions and inventors attempted to appropriate returns. Prizes in general provided valuable prospects for advertisements and commercialization, rather than inventive activity per se. Prize winners typically belonged to more privileged classes than the general population of patentees, as gauged by their wealth and occupational status. Moreover, the award of prizes tended to largely unpredictable, and was unrelated to such proxies for the productivity of the innovation as inventive capital or the commercial success of the invention. Prize-oriented institutions thus appear to be less systematic and not as market-oriented as patent systems. If inventors respond to expected returns, prizes may be less effective at inducing technological creativity.

download in pdf format
   (501 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20731

Users who downloaded this paper also downloaded* these:
Khan w20732 Of Time and Space: Technological Spillovers among Patents and Unpatented Innovations during Early U.S. Industrialization
Khan w21375 Inventing Prizes: A Historical Perspective on Innovation Awards and Technology Policy
Chabot, Ghysels, and Jagannathan w20660 Momentum Trading, Return Chasing, and Predictable Crashes
Wolff w20733 Household Wealth Trends in the United States, 1962-2013: What Happened over the Great Recession?
De Fiore and Uhlig w20730 Corporate Debt Structure and the Financial Crisis
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us