Disadvantage of Intellectual Property (etc.): Can Generate Socially Wasteful Rent Dissipation

Potential Sites:

1. wasteful duplicative research at primary level

Grady/Alexander (1992)

Denicolo (2000)

2. wasteful duplicative research at secondary (improvements) level

may be mitigated by increased patent breadth (facilitating coordination) and/or reforms that might mitigate impediments to cumulative innovation

compare Kitch (1977) with Merges and Nelson (1990)

3. wasteful efforts to "invent around" patents or copyrights

Gallini (1992)

mitigated by licensing -- Maurer/Scotchmer (1998)

qualified by unexpected benefits of compelled inventing around

4. division of spoils through oligopoly, diminishing the share of profits that stimulate innovation

Kaplow (1984)