Answers are grounded in this paper and cite their sources.
We develop a theory of the rent distribution and stability of innovative firms. Our theory is based on a model of bargaining over new ideas. The model accounts for the problem of information leakage, namely, the diffusion of information about new ideas among the agents that participate in the bargaining. Our main results draw a link between the strength of intellectual property rights enforcement and the distribution of rents in firms as well as between the size and organization of firms and their stability. Our theory explains why small firms are advantaged in introducing innovation into the market and why spin-outs tend to emerge from large established firms.
No takes yet. Share an insight, caveat, or question.
Baccara et al. (2007) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: