Downloads: 5

Files in This Item:
File Description SizeFormat 
DP1065.pdf396.81 kBAdobe PDFView/Open
Title: Technological Competition, Cumulative Innovation, and Technological Development Schemes
Authors: Ambashi, Masahito
Keywords: technological competition
cumulative innovation
technological development scheme
grant-back clause
Issue Date: Aug-2021
Publisher: Institute of Economic Research, Kyoto University
Journal title: KIER Discussion Paper
Volume: 1065
Start page: 1
End page: 26
Abstract: This study investigates which technological development schemes are most desirable for technological competition and cumulative innovation, including follow-on innovation, under uncertainty conditions. Technological competition is likely to generate a social overincentive for innovations; it does so for follow-on innovation, especially when the consumer surplus is negligible. This study determines that a contract with a grant-back clause combined with an appropriate profit distribution mitigates social overinvestment in both initial and follow-on innovation; and therefore, improves social welfare. Moreover, this study demonstrates that if a government can specify a particular profit distribution between firms, the socially optimal investment in initial innovation can be realized. Conversely, assuming a significantly positive consumer surplus instead, this study reveals that competition in follow-on innovation creates a higher level of social welfare.
Description: Revised: September 2021
Related Link:
Appears in Collections:KIER Discussion Paper (English)

Show full item record

Export to RefWorks

Export Format: 

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.