312001 Innovationsökonomik (V) (WiSe 2025/2026)

The primary objective of this course is to acquaint advanced economics students with the
analytical foundations of the economics of innovation. The course develops a rigorous
understanding of theoretical models of innovation, with particular emphasis on firms’
incentives to innovate. Core topics include the relationship between innovation incentives and
market structure, the distinction between product and process innovations, technological
spillovers, research and development (R&D) cooperation, and the economic role of patents.

Preliminary outlook:
• Introduction
• Market structure and innovations
• Product and process innovations
• Technological spillovers
• R&D Cooperation
• Patents

Exams:
The course will conclude with a final oral examination. Exact date(s) will be announced later.

Requirements for participation, required level

Basic knowledge of microeconomics and game theory is required, including familiarity with supply and demand theory, competition and market structures, and fundamental concepts of strategic interaction.

Bibliography

Recommended Literature:
• Hall, B. and Helmers, Ch., The Economics of Innovation and Intellectual Property,
Oxford University Press, 2024.
• Industrial Organization: Markets and Strategies, Belleflamme, P. and Peitz, M.,
Cambridge University Press, 2015.
• Stoneman, P. (Ed.), Handbook of the Economics of Innovation and Technological
Change, Blackwell, 1995.
• Arrow(1962), Economic welfare and the allocation of the resources for invention, in
Nelson, R.R. (ed.) The rate and direction of inventive activity, PUP, 609-627.
• Dasgupta, P and Stiglitz, J. (1980), Industrial Structure and the Nature of Innovative
Activity, The Economic Journal, 90, 358, 266-293.
• Lin, P und Saggi, K. (2002), Product differentiation, process R & D, and the nature of
market competition, Europ. Econ. Review, 46, 201-211.
• Jaffe, A., Trajtenberg, M., Henderson, R. (1993), Geographic Localization of
Knowledge Spillovers as Evidenced by Patent Citations, Quarterly Journ. of Econ., 108,
577-598.
• D’Aspremont, C und Jacquemin, A. (1988), Cooperative and Noncooperative R&D in
Duopoly with Spillovers, American Econ. Review, 78, 1133-1137.
• Hagedoorn, J. (2002). Inter firm R&D partnerships: an overview of major trends and
patterns since 1960. Research Policy, 31: 477-492.
• Goyal, S. and Joshi, S. (2003), Networks of collaboration in oligopoly, Games and
Economic Behavior, 43, 57-85.
• Kamien, M., Muller, E.und Zhang,.I. (1992), Research Joint Ventures and R&D
Cartels, American Economic Review, 82, 1293-1306.
• Gilbert, R und Shapiro, C. (1990), “Optimal Patent Length and Breadth”, Rand Journ.
of Econ., 21, 106-112.
• Gallini, N.T. (1992), “Patent Policy and Costly Imitation”, Rand Journ. of Econ., 23,
52-63.
• Gallini, N. und Scotchmer, S. (2002), „Intellectual Property: When is it the best
incentive System? “, in Jaffe et al. (Eds.), Innovation Policy and the Economy, MIT
Press.