The optimal timing of procurement decisions and patent allocations

Motty Perry, Daniel R. Vincent

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

In a patent race, social incentives and private incentives may sometimes coincide and at other times diverge - too many researchers remain in the race. If the social planner cannot determine What stage the researchers have achieved, this informational constraint can result in a socially suboptimal outcome. We construct a mechanism in which a planner exploits the researchers' private information to determine when and to whom to allocate rights to pursue the final prize. This mechanism does not require any payments and, therefore, will not distort earlier investment incentives. It is solvable by the iterative elimination of dominated strategies.

Original languageEnglish
Pages (from-to)1035-1052
Number of pages18
JournalInternational Economic Review
Volume43
Issue number4
DOIs
StatePublished - Nov 2002
Externally publishedYes

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