The paper develops a comprehensive framework demonstrating how patents provide the foundation of the market for inventions. Patents support the establishment of the market in several key ways. First, patents provide a system of intellectual property (IP) rights that increases transaction...

Tacit knowledge affects the trade-off between entrepreneurship and technology transfer. I present a formal model in which an inventor and the existing firm engage in a strategic innovation game by choosing whether to compete or to cooperate through technology transfer. The model highlights how...

I consider whether government prizes should replace market prices for inventions. The America COMPETES Reauthorization Act of 2010 establishes a framework for government prizes. I examine how antitrust and public policy towards patents should take into account the economic benefits of the market...

The market for ideas makes new combinations of inventions to form complex innovations such smart phones and mobile broadband networks. I show that bargaining in the market for ideas provides efficient coordination with complementary inventions. Extending neoclassical economic tools to the market...