Economics semianr: On the mechanism of innovation
- When?
- Wednesday 26 October 2011, 16:00 to 17:00
- Where?
- 04AD00
- Open to:
- Public, Staff, Students
- Speaker:
- Dr. Nicole Tabasso (Surrey)
Dr. Nicole Tabasso (Surrey)
"On the mechanism of innovation" (with Christian Ghiglino)
Abstract
The present paper presents a model of incremental innovation in technology, in which new ideas rest on previous ones. The model describes an optimal algorithm for innovation, which depicts a stylised innovation process. The existence of similar innovation rules in practise is investigated with patent data. In our dataset, we find evidence of pairs of patents that can be deemed \similar" to each other, i.e., we finnd patent pairs that share on average roughly 30-40% of their citations with each other. Preliminary results indicate that this interconnectedness of patents is increasing in the number of patents granted in the same technological area (approximated by a 3-digit class). It also appears that patents with a high degree of similarity are cited, on average, just as much as patents that share barely any or none of their citations with another patent. To the extent that the number of citations received is indicative of patent quality, this result implies that incremental innovation can be as profitable as radical innovation. In the future, we wish to complement our results from the patent data with laboratory experiments to investigate further how individuals choose to innovate if presented with a given good/process.