American Economic Review Vol. 91 No. 1 2001

Proofs and Prototypes for Sale: The Licensing of University Inventions

Richard Jensen¹; Marie Thursby²

¹ Department of Economics, 245 O'Shaughnessy Hall, University of Notre Dame, Notre Dame, IN 46556. · ² Department of Economics, 1310 Krannert Building, Purdue University, West Lafayette, IN 47907.

Abstract

Proponents of the Bayh-Dole Act argue that industrial use of federally funded research would be reduced without university patent licensing. Our survey of U.S. universities supports this view, emphasizing the embryonic state of most technologies licensed and the need for inventor cooperation in commercialization. Thus, for most university inventions, there is a moral-hazard problem with inventor effort. For such inventions, development does not occur unless the inventor's income is tied to the licensee's output by payments such as royalties or equity. Sponsored research from the licensee cannot by itself solve this problem.

DOI

10.1257/aer.91.1.240

Volume

91

Issue

1

Pages

240-259

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓