Standards and the Incentives for Innovation

Troy J. Scott, John T. Scott
2013 Social Science Research Network  
We model the economics of the effects of standards on incentives for innovative investment. We use survey data from industrial respondents to parameterize our model, allowing us to explain and predict effects of technology standards on investment in the development of technology and thereby assess the benefits and costs of technology standards in a market equilibrium setting. Having parameterized the model with the responses of industry to our survey, we can also describe the differences in
more » ... cts of standards for different types of firms and for different types of industrial research, and we can simulate the effects of stronger or weaker intellectual property (IP) protection, using the industrial responses to answer the question of how the opposing effects from changes in IP protection on balance affect innovative investments. We find that the net effects of standards for IP protection are positive, increasing innovative investments and increasing their private and social value.
doi:10.2139/ssrn.2240940 fatcat:kdyvh3qkojdlxcfvqobpvkke3a