Social Insurance and the Design of Innovation Incentives
Published in: Economics Letters, v. 85, no. 1, Oct. 2004, p. 57-61
Posted on RAND.org on December 31, 2003
The authors consider the insurance aspects of research policy. Patents or rewards have an advantage over research subsidies when a new invention replaces an existing good at lower cost. Research subsidies have an advantage when inventions spawn an entirely new product.