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Promoting Intellectual Discovery: Patents Versus Markets

Meloso, Debrah and Copic, Jernej and Bossaerts, Peter (2009) Promoting Intellectual Discovery: Patents Versus Markets. Science, 323 (5919). pp. 1335-1339. ISSN 0036-8075.

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Because they provide exclusive property rights, patents are generally considered to be an effective way to promote intellectual discovery. Here, we propose a different compensation scheme, in which everyone holds shares in the components of potential discoveries and can trade those shares in an anonymous market. In it, incentives to invent are indirect, through changes in share prices. In a series of experiments, we used the knapsack problem (in which participants have to determine the most valuable subset of objects that can fit in a knapsack of fixed volume) as a typical representation of intellectual discovery problems. We found that our "markets system" performed better than the patent system.

Item Type:Article
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Bossaerts, Peter0000-0003-2308-2603
Additional Information:© 2009 American Association for the Advancement of Science. Received for publication 3 April 2008. Accepted for publication 5 January 2009. This study was partly funded by the U.S. NSF (grants SES-0616431 and SES-0317715) and the Swiss Finance Institute.
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Swiss Finance InstituteUNSPECIFIED
Issue or Number:5919
Record Number:CaltechAUTHORS:20090909-113900592
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Official Citation:Promoting Intellectual Discovery: Patents Versus Markets Debrah Meloso, Jernej Copic, and Peter Bossaerts (6 March 2009) Science 323 (5919), 1335. [DOI: 10.1126/science.1158624]
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:15692
Deposited By: George Porter
Deposited On:22 Sep 2009 20:46
Last Modified:03 Oct 2019 01:01

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