Intermediation in Innovation

28 Pages Posted: 27 May 2005

See all articles by Heidrun C. Hoppe-Wewetzer

Heidrun C. Hoppe-Wewetzer

University of Hannover - Department of Economics; and CEPR

Emre Ozdenoren

London Business School; Centre for Economic Policy Research (CEPR)

Date Written: February 2005


The paper offers a new theoretical framework to examine the role of intermediaries between creators and users of new inventions. We find that uncertainty about the profitability of investing in new inventions generates a basis for intermediation. An intermediary may provide an opportunity to economize on a critical component of efficient investment decisions - the expertise to sort 'profitable' from 'unprofitable' inventions. Our findings may help explain the surge in university patenting and licensing since the Bayh-Dole Act of 1980. The study also identifies several limitations to the potential efficiency of intermediation in innovation.

Keywords: Intermediation, market microstructure, matching, uncertainty, innovation, patent licensing

JEL Classification: D40, D80, L12, L13, O32

Suggested Citation

Hoppe-Wewetzer, Heidrun C. and Ozdenoren, Emre, Intermediation in Innovation (February 2005). Available at SSRN:

Heidrun C. Hoppe-Wewetzer (Contact Author)

University of Hannover - Department of Economics; and CEPR ( email )

Koenigsworther Platz 1
30167 Hannover


Emre Ozdenoren

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Centre for Economic Policy Research (CEPR)

United Kingdom

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