Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE ( © Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 14 July 2020

Abstract and Keywords

Efficient innovation policy requires decoupling of the innovator's private rewards from consumer prices, and instead tying them to the marginal social value of the invention. This is not easy to achieve, but movement toward this goal can be effected through a mix of policy instruments. This article develops this thesis by drawing on the existing theoretical and empirical literature on innovation. It begins with the canonical positive model of innovative activity, along with its various extensions, weaknesses, and criticisms. It then turns to the empirical literature testing and quantifying the implications of this theory and its variants. Next, it moves to the normative implications of economic theory and describes how the empirical literature sheds light on the nature and degree of inefficiency in the discovery and dissemination of innovative goods. Finally, it characterizes various policy approaches to ameliorating these inefficiencies at their root.

Keywords: innovation, social value, canonical positive model, innovative activity, normative theory

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.