Institutional Affiliation: Massachusetts Institute of Technology
|Patents and Research Investments: Assessing the Empirical Evidence|
with , : w21889
A well-developed theoretical literature — dating back at least to Nordhaus (1969) — has analyzed optimal patent policy design. We re-present the core trade-off of the Nordhaus model and highlight an empirical question which emerges from the Nordhaus framework as a key input into optimal patent policy design: namely, what is the elasticity of R&D investment with respect to the patent term? We then review the — surprisingly small — body of empirical evidence that has been developed on this question over the nearly half century since the publication of Nordhaus's book.
Published: Eric Budish & Benjamin N. Roin & Heidi Williams, 2016. "Patents and Research Investments: Assessing the Empirical Evidence," American Economic Review, vol 106(5), pages 183-187. citation courtesy of
|Do firms underinvest in long-term research? Evidence from cancer clinical trials|
with , : w19430
We investigate whether private research investments are distorted away from long-term projects. Our theoretical model highlights two potential sources of this distortion: short-termism and the fixed patent term. Our empirical context is cancer research, where clinical trials – and hence, project durations – are shorter for late-stage cancer treatments relative to early-stage treatments or cancer prevention. Using newly constructed data, we document several sources of evidence that together show private research investments are distorted away from long-term projects. The value of life-years at stake appears large. We analyze three potential policy responses: surrogate (non-mortality) clinicaltrial endpoints, targeted R&D subsidies, and patent design.
Published: “Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials” (with Benjamin Roin and Heidi Williams) American Economic Review, Vol 105(7), 2044-2085. citation courtesy of