The Optimal Timing of Procurement Decisions and Patent Allocations

18 Pages Posted: 5 Jan 2003

See all articles by Motty Perry

Motty Perry

Hebrew University of Jerusalem - Center for the Study of Rationality; Pennsylvania State University, College of the Liberal Arts - Department of Economic

Daniel R. Vincent

University of Maryland - Department of Economics

Abstract

In a patent race, social incentives and private incentives may sometimes coincide and at other times diverge - too many researchers remain in the race. If the social planner cannot determine what stage the researchers have achieved, this informational constraint can result in a socially suboptimal outcome. We construct a mechanism in which a planner exploits the researchers' private information to determine when and to whom to allocate rights to pursue the final prize. This mechanism does not require any payments and, therefore, will not distort earlier investment incentives. It is solvable by the iterative elimination of dominated strategies.

Suggested Citation

Perry, Motty and Perry, Motty and Vincent, Daniel R., The Optimal Timing of Procurement Decisions and Patent Allocations. Available at SSRN: https://ssrn.com/abstract=342746

Motty Perry (Contact Author)

Hebrew University of Jerusalem - Center for the Study of Rationality ( email )

Feldman Building
Givat-Ram
Jerusalem, 91904
Israel

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States

Daniel R. Vincent

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3485 (Phone)
301-405-3542 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
29
Abstract Views
717
PlumX Metrics