Patents, Inducement Prizes, and Contestant Strategy

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Patents, Inducement Prizes, and Contestant Strategy

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dc.contributor.author Davis, Jerome en_US
dc.contributor.author Davis, Lee en_US
dc.date.accessioned 2009-02-04T10:26:25Z
dc.date.available 2009-02-04T10:26:25Z
dc.date.issued 2007-01-03T00:00:00Z en_US
dc.identifier.uri http://hdl.handle.net/10398/7204
dc.description.abstract Debate over the merits of patents versus inducement prizes has tended to ignore the signaling roles of patents, and totally ignores the impact of patent signaling on prize contests. This paper asks: How does patent signaling affect the strategic choices of firms considering entering prize contests? First, we consider contests that do not allow patenting, then contests that do. If patenting is not allowed, we argue, patent-holders, both internal and external to the contest, can adversely impact prize contests by claiming prize winner violation of their patents, and suing for damages. The likelihood of such challenges being made can deter entry, particularly in contests requiring large sunk costs. Furthermore, the firm's decisionmaking process will discriminate against entering prize contests and favor R&D projects with patentable outcomes. Together, these problems may circumscribe any future wider role for prize contests, and limit their major putative welfare advantage: the ability to place prize winning solutions into the public domain. In contests where entrants may patent their inventions, entry is subject to basically the same problems as above (although such contests may carry some advantages as regards contest design). Our overall conclusion is that prize contests are liable to fail due to the lack of potential entrants, particularly as regards entry on the part of larger commercial firms. en_US
dc.format.extent 27 s. en_US
dc.language eng en_US
dc.relation.ispartofseries DIME Working Paper;2006-012 en_US
dc.subject.other crowding out en_US
dc.title Patents, Inducement Prizes, and Contestant Strategy en_US
dc.type wp en_US
dc.accessionstatus modt07jan03 mielmo en_US
dc.contributor.corporation Dynamics of Institutions and Markets in Europe en_US
dc.contributor.corporation Copenhagen Business School. CBS
dc.contributor.corporationshort DIME en_US
dc.contributor.department Institut for Industriøkonomi og Virksomhedsstrategi en_US
dc.contributor.departmentshort IVS en_US
dc.contributor.departmentuk Department of Industrial Economics & Strategy en_US
dc.contributor.departmentukshort IES en_US
dc.description.notes Paper presented to the DIME IPR workshops in London, England March 23-24 2006 en_US
dc.description.notes Further information on the DIME IPR research and activities: http://ipr.dime-eu.org/ en_US
dc.idnumber x656537492 en_US
dc.publisher.city København en_US
dc.publisher.year 2006 en_US
dc.title.subtitle Do Patents "Crowd Out” Prizes? en_US


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