Innovation Rewards: Towards Solving the Twin Market Failures of Public Goods

28 Pages Posted: 24 May 2016 Last revised: 17 Jun 2016

Gregory N. Mandel

Temple University - James E. Beasley School of Law

Date Written: April 23, 2016

Abstract

The challenge of achieving socially optimal incentives for innovation in public goods faces twin market failures: a market failure to adequately promote public goods invention and a market failure to implement innovative public goods once developed. Though innovation in private goods sometimes faces the former hurdle, often ameliorated by intellectual property law, the interaction of both market failures for public goods innovation raises unique difficulties.

Environmentally beneficial technology presents an illustration of the innovation problem for public goods. Private actors lack sufficient incentives both to engage in environmentally beneficial innovation and to implement such innovation. While traditional intellectual property law and environmental law fail to cure the interaction of these public goods market failures, an innovation rewards system could produce more socially appropriate incentives. Using environmentally beneficial innovation as an example, this Article introduces a new framework for an innovation rewards system for public goods and discusses its implementation and potential advantages.

Keywords: innovation, patent, environment, public goods, market failure

JEL Classification: D62, H41, K32, O31, O33, O34, O38

Suggested Citation

Mandel, Gregory N., Innovation Rewards: Towards Solving the Twin Market Failures of Public Goods (April 23, 2016). Vanderbilt Journal of Entertainment & Technology Law, Vol. 18, No. 303, 2016; Temple University Legal Studies Research Paper No. 2016-30. Available at SSRN: https://ssrn.com/abstract=2783394

Gregory Mandel (Contact Author)

Temple University - James E. Beasley School of Law ( email )

1719 N. Broad Street
Philadelphia, PA 19122
United States
(215) 204-2381 (Phone)

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