Rewards Versus Intellectual Property Rights

Harvard Law School, Olin Center for Law, Economics & Business, Discussion Paper No. 246

34 Pages Posted: 29 Jan 1999

See all articles by Steven Shavell

Steven Shavell

Harvard Law School; National Bureau of Economic Research (NBER)

Tanguy Van Ypersele

National Center for Scientific Research (CNRS) - Research Group in Quantitative Saving (GREQAM); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: December 1998

Abstract

This paper compares reward systems to intellectual property rights (patents and copyrights). Under a reward system, innovators are paid for innovations directly by government (possibly on the basis of sales), and innovations pass immediately into the public domain. Thus, reward systems engender incentives to innovate without creating the monopoly power of intellectual property rights, but a principal difficulty with rewards is the information required for their determination. We conclude in our model that intellectual property rights do not possess a fundamental social advantage over reward systems, and that an optional reward system--under which innovators choose between rewards and intellectual property rights--is superior to intellectual property rights.

JEL Classification: D23, K11, L10

Suggested Citation

Shavell, Steven and Van Ypersele, Tanguy, Rewards Versus Intellectual Property Rights (December 1998). Harvard Law School, Olin Center for Law, Economics & Business, Discussion Paper No. 246. Available at SSRN: https://ssrn.com/abstract=145292 or http://dx.doi.org/10.2139/ssrn.145292

Steven Shavell (Contact Author)

Harvard Law School ( email )

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National Bureau of Economic Research (NBER)

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Tanguy Van Ypersele

National Center for Scientific Research (CNRS) - Research Group in Quantitative Saving (GREQAM) ( email )

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France
+33 4 4293 5983 (Phone)
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Centre for Economic Policy Research (CEPR)

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United Kingdom

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