Intermediaries and Innovation- Why they emerge and how they facilitate IP Transactionson the Markets for Technology

With this paper we aim to contribute to the discussion about the difficulties that occur when trading technicalknowledge and particularly patents. Currently one can observe that markets for technology have been sizablegrowing, transaction obstacles are still immanent and technology market intermediaries (TMI) emerge that developnew models aiming to facilitate Intellectual Property (IP) transactions. Why TMIs emerge and how they attempt tofacilitate IP transactions however is not yet sufficiently understood. We propose theoretical explanations for thesetwo questions building primarily on the contributions of Stigler (1951) and Williamson (1979). We argue that thegrowing markets for technologies on the one hand and immanent transaction obstacles on the other hand lead tofurther division of labor and thus foster the emergence of TMIs. Following Williamson (1979) we propose that thenew transaction models developed by TMIs attempt to implement more standardized governance structures in orderto diminish transaction costs. However it remains to be seen which of the newly developed models (or those tocome) will survive and actually deliver more economic transactions.