Mainstream endogenous growth models assume that new knowledge is embodied into new intermediate or final goods, monopolistically supplied by the patent holder. Recent technological progress, however, often gives rise to pure intellectual contents, such as software codes or business models, directly usable in the production of final goods. Once a content of this type has been produced, it is in fixed supply, that is, the inventor can only rent it out (or sell it) or not; hence the quantity restriction typical of monopoly cannot arise, while competition is viable (Chantrel et al., 2012; Marchese and Privileggi, 2014). We show that, however, as long as the inventor owning a patent can control through license activation devices the access to the intellectual content of the workers using her invention in the final goods production, monopolistic exploitation becomes viable and will occur. It turns out that in this framework both the level of wages and of consumption and the rate of growth of the economy are smaller than in the first best, while with elastic labor supply also labor employment is negatively impacted. This implies that some standard public policies devised for correcting inefficiencies in development can perform poorly in this framework.

Endogenous Economic Growth with Disembodied Knowledge

MARCHESE, Carla;PRIVILEGGI, Fabio
2015-01-01

Abstract

Mainstream endogenous growth models assume that new knowledge is embodied into new intermediate or final goods, monopolistically supplied by the patent holder. Recent technological progress, however, often gives rise to pure intellectual contents, such as software codes or business models, directly usable in the production of final goods. Once a content of this type has been produced, it is in fixed supply, that is, the inventor can only rent it out (or sell it) or not; hence the quantity restriction typical of monopoly cannot arise, while competition is viable (Chantrel et al., 2012; Marchese and Privileggi, 2014). We show that, however, as long as the inventor owning a patent can control through license activation devices the access to the intellectual content of the workers using her invention in the final goods production, monopolistic exploitation becomes viable and will occur. It turns out that in this framework both the level of wages and of consumption and the rate of growth of the economy are smaller than in the first best, while with elastic labor supply also labor employment is negatively impacted. This implies that some standard public policies devised for correcting inefficiencies in development can perform poorly in this framework.
2015
Dip. Cognetti De Martiis Working Paper Series
25/2015
1
12
http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2015dip/wp_25_2015.pdf
Endogenous growth; patent; monopoly; dematerialized knowledge
Marchese, Carla; Privileggi, Fabio
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/1625883
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