title: PATENTS AND RESEARCH INVESTMENTS: ASSESSING THE EMPIRICAL EVIDENCE.
abstract: A well-developed theoretical literature - dating back at least to Nordhaus (1969) - has analyzed optimal patent policy design. We re-present the core trade-off of the Nordhaus model and highlight an empirical question which emerges from the Nordhaus framework as a key input into optimal patent policy design: namely, what is the elasticity of R&D investment with respect to the patent term? We then review the - surprisingly small - body of empirical evidence that has been developed on this question over the nearly half century since the publication of Nordhaus's book.
authors.affiliation: Booth School of Business, University of Chicago, 5807 South Woodlawn Avenue, Chicago, IL 60637 and NBER, eric.budish@chicagobooth.edu.
authors.forename: Eric
authors.initials: E
authors.lastname: Budish
authors.affiliation: Massachusetts Institute of Technology, broin@mit.edu.
authors.forename: Benjamin N
authors.initials: BN
authors.lastname: Roin
authors.affiliation: Department of Economics, E52-452, MIT, 50 Memorial Drive, Cambridge MA 02139 and NBER, heidiw@mit.edu.
authors.forename: Heidi L
authors.initials: HL
authors.lastname: Williams