2008/09/01 by Philippe Aghion, Mathias Dewatripont, Jeremy C. Stein · 2 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Innovation Policy and R&D #Intellectual Property and Patents #Pharmaceutical Economics and Policy
paper · pdf · doi:10.1111/j.1756-2171.2008.00031.x
openalex publication_date 2008/09/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
We develop a model that clarifies the respective advantages and disadvantages of academic and private‐sector research. Rather than relying on lack of appropriability or spillovers to generate a rationale for academic research, we emphasize control‐rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early‐stage research. At the same time, the private sector's ability to direct scientists toward higher‐payoff activities makes it more attractive for later‐stage research.