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Patent Pools and the Direction of Innovation - Evidence from the 19th-Century Sewing Machine Industry

36 Pages Posted: 5 Nov 2011  

Ryan Lampe

California State University, East Bay - Department of Economics

Petra Moser

Leonard N. Stern School of Business - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: November 2011

Abstract

Patent pools allow a group of firms to combine their patents as if they were a single firm. Theoretical models predict that pools encourage innovation in pool technologies, albeit at the cost of innovation in substitutes. Empirical evidence is scarce because modern pools are too recent to allow empirical analyses. This article examines data on patents and innovations by new firms for a historical pool in the sewing machine industry (1856-1877) to examine effects on innovation. Contrary to theoretical predictions, this analysis suggests that pools may discourage innovation in pool technologies and shift R&D towards technologically inferior substitutes.

Suggested Citation

Lampe, Ryan and Moser, Petra, Patent Pools and the Direction of Innovation - Evidence from the 19th-Century Sewing Machine Industry (November 2011). NBER Working Paper No. w17573. Available at SSRN: https://ssrn.com/abstract=1955104

Ryan Lampe (Contact Author)

California State University, East Bay - Department of Economics ( email )

25800 Carlos Bee Blvd.
Hayward, CA 94542
United States

Petra Moser

Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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