2017/28 | LEM Working Paper Series | ||||||||||||||||
Diffusing New Technology without Dissipating Rents: Some Historical Case Studies of Knwoledge Sharing |
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James Bessen and Alessandro Nuvolari |
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Keywords | |||||||||||||||||
technological change, technology diffusion, knowledge sharing, collective invention, patents
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JEL Classifications | |||||||||||||||||
N70, O33, O34
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Abstract | |||||||||||||||||
The diffusion of innovations is supposed to dissipate inventors’
rents. Yet in many documented cases, inventors freely shared knowledge
with their competitors. Using a model and case studies, this paper
explores why sharing did not eliminate inventors’ incentives. Each new
technology coexisted with an alternative for one or more decades. This
allowed inventors to earn rents while sharing knowledge, attaining
major productivity gains. The technology diffusion literature suggests
that such circumstances are common during the early stages of a new
technology.
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