17 November 2020
Please join us for a webinar on Tuesday the 24th of November 2020 at 11:00 London time i.e. 12:00 Brussels time, 13:00 Athens time. The speaker is Christian Kiedaisch, Department of Economics, University of Namur. The title of the talk is "Superstar Innovators and the Effect of IP Rights on Innovation". The moderator is Dr. Andreas Panagopoulos. To join us follow this link:
This webinar is free and open to all. To participate and for further information, please contact Dr. Andreas Panagopoulos at least a day prior to the seminar.
Abstract: "This paper analyzes how the effect of intellectual property rights (IPRs) on innovation depends on the distribution of innovation rents across the population. This is done in a product-variety growth model with non-homothetic preferences and endogenous markups in which richer households consume a larger variety of goods than poorer ones. Innovation rents emerge because there are infra-marginal superstar innovators who generate more valuable innovations than the marginal innovators do. It is shown that increasing IPR protection increases growth when innovation rents are widely distributed across the population but that it can reduce growth when innovation rents accrue to a minority of rich superstar innovators. The mechanism behind this result is the following: as rich (superstar) households are already satiated with the consumption of the existing innovative goods, they spend incremental income on non-innovative (service) goods. Because of that, an increase in IPR protection that increases the rents of superstar innovators by increasing the average markups of innovative goods decreases the market demand for marginal innovative goods. While reducing IP protection reduces the incentives to innovate when market demand is given, it can therefore increase them when it leads to a sufficient increase in the market demand for marginal (non-superstar) innovations."