Innovation serves as an important source of productivity growth. More than one half of the growth in the United States’ productivity between 1948 and 2014 came from innovators and entrepreneurs, who worked to create new products or make improvements to existing products.1 Academic research, such as Geroski (1989) and Romer (1990), has long acknowledged the importance of innovation to economic g...

This paper introduces the idea that strong patent protection can lead innovators to rest on their laurels, into a simple tournament based framework. Concentrating on optimal patent protection, the one that maximizes production, the model shows that there is a positive relationship between the ability of the economy (Þrm) to innovate and how strong patent protection should be. This line of think...

In a study of innovations developed by mountain bikers, we find that userinnovators almost always utilize “local” information – information already in their possession or generated by themselves both to determine the need for and to develop the solutions for their innovations. We argue that this finding fits the economic incentives operating on users. Local need information will in general be t...

This paper uses an analytical model to examine when it makes sense to provide incentives to innovators to adopt a new product. The model allows for separate segments of innovators and imitators, each of which follows a Bass-type diffusion process. Interestingly “seeding” the market is optimal for a limited range of situations and these do not appear to include those where there is a downturn in...