Law and the Boundaries of Technology-Intensive Firms
Harvard Law School
University of Pennsylvania Law School; Bar Ilan University - Faculty of Law
University of Pennsylvania Law Review, Vol. 157, Pg. 1649, 2009
NYU Law and Economics Research Paper No. 04-06
U of Penn, Inst for Law & Econ Research Paper 05-10
Arrow's disclosure paradox implies that information that is not afforded legal protection cannot be bought or sold on the market. This paper emphasizes the important relationship between the paradox of disclosure and the boundaries of the firm question. Only legally protected inventions, i.e., patented inventions, may be traded; pre-patent stages of the innovation process may not. Consequently, by force of law, rather than by the guidance of economic principle, pre-patent innovation must be carried out within the boundaries of a single firm.
Number of Pages in PDF File: 41
Keywords: Boundaries of the firm, disclosure paradox, intellectual property law
JEL Classification: D23, K11, L22
Date posted: April 11, 2005 ; Last revised: August 21, 2009
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