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Inducement Prizes and Innovation


Liam Brunt


NHH - Norwegian School of Economics; Centre for Economic Policy Research (CEPR)

Josh Lerner


Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER)

Tom Nicholas


Harvard University - Entrepreneurial Management Unit
December 1, 2011

NHH Dept. of Economics Discussion Paper No. 25/2011

Abstract:     
We examine the effect of prizes on innovation using data on awards for technological development offered by the Royal Agricultural Society of England at annual competitions between 1839 and 1939. We find large effects of the prizes on competitive entry and we also detect an impact of the prizes on the quality of contemporaneous patents, especially when prize categories were set by a strict rotation scheme, thereby mitigating the potentially confounding effect that they targeted only “hot” technology sectors. Prizes encouraged competition and medals were more important than monetary awards. The boost to innovation we observe cannot be explained by the re-direction of existing inventive activity.

Number of Pages in PDF File: 52

Keywords: Awards, Patents, Contests

JEL Classification: O31, O30, N40

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Date posted: December 15, 2011  

Suggested Citation

Brunt, Liam, Lerner, Josh and Nicholas, Tom, Inducement Prizes and Innovation (December 1, 2011). NHH Dept. of Economics Discussion Paper No. 25/2011. Available at SSRN: http://ssrn.com/abstract=1972290 or http://dx.doi.org/10.2139/ssrn.1972290

Contact Information

Liam Brunt (Contact Author)
NHH - Norwegian School of Economics ( email )
Department of Economics
Helleveien 30
N-5035 Bergen, Hordaland
Norway

Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Josh Lerner
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-495-6065 (Phone)
617-496-7357 (Fax)
HOME PAGE: http://www.people.hbs.edu/jlerner/
Harvard University - Entrepreneurial Management Unit
Cambridge, MA 02163
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Tom Nicholas
Harvard University - Entrepreneurial Management Unit ( email )
Cambridge, MA 02163
United States
Feedback to SSRN (Beta)


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