Patents and Research Investments: Assessing the Empirical Evidence

9 Pages Posted: 20 Jan 2016 Last revised: 6 Feb 2016

See all articles by Eric B. Budish

Eric B. Budish

University of Chicago - Booth School of Business

Benjamin N. Roin

affiliation not provided to SSRN

Heidi L. Williams

MIT Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 2016

Abstract

A well-developed theoretical literature — dating back at least to Nordhaus (1969) — has analyzed optimal patent policy design. We re-present the core trade-off of the Nordhaus model and highlight an empirical question which emerges from the Nordhaus framework as a key input into optimal patent policy design: namely, what is the elasticity of R&D investment with respect to the patent term? We then review the — surprisingly small — body of empirical evidence that has been developed on this question over the nearly half century since the publication of Nordhaus's book.

Suggested Citation

Budish, Eric B. and Roin, Benjamin N. and Williams, Heidi L., Patents and Research Investments: Assessing the Empirical Evidence (January 2016). NBER Working Paper No. w21889, Available at SSRN: https://ssrn.com/abstract=2717300

Eric B. Budish (Contact Author)

University of Chicago - Booth School of Business ( email )

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Benjamin N. Roin

affiliation not provided to SSRN

Heidi L. Williams

MIT Department of Economics ( email )

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Cambridge, MA 02142
United States
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(617) 253-1330 (Fax)

HOME PAGE: http://econ-www.mit.edu/faculty/heidiw

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