Publications
Publications
- March 1994
- American Economic Review
Expropriation and Inventions: Appropriable Rents in the Absence of Property Rights
By: J. Anton and Dennis Yao
Abstract
We analyze the problem faced by a financially weak independent inventor when selling a valuable, but easily imitated, invention for which no property rights exist. The inventor can protect his or her intellectual property by negotiating a contingent contract (with a buyer) prior to revealing the invention or, alternatively, the inventor can reveal the invention and then negotiate with the newly informed buyer. Despite the risk of expropriation, we find that, in equilibrium, an inventor with little wealth can expect to appropriate a sizable share of the market value of the invention by adopting the latter approach.
Keywords
Citation
Anton, J., and Dennis Yao. "Expropriation and Inventions: Appropriable Rents in the Absence of Property Rights." American Economic Review 84, no. 1 (March 1994): 190–209. (reprinted in Z. Acs, ed., The Knowledge Spillover Theory of Entrepreneurship, Elgar, 2010). Harvard users click here for full text.)