Search results for "Pace of innovation"

A Dynamic Model of Open Source Vs Proprietary R&D

2017

Abstract We propose a dynamic model in which firms compete to produce sequential and cumulative innovations, and in which the more firms do research in one sector the more likely it is that one of them innovates. Firms choose research effort and whether to patent innovations or to use an Open Source license like the General Public License. We show that ( i ) patents generate a larger stationary reward but foreclose research within a sector, and that ( ii ) Open Source generates a smaller stationary reward but allows everyone to use the technology, and therefore, by attracting firms to the sector, it induces a faster pace of innovation. We characterize all the equilibria of the model and sho…