Values of intellectual property protection policies

Intellectual property protection (IPP) is crucial for innovation all over the world. Using game theory approaches, this article captures the effects of IPP on the economy. On one hand, this article argues that innovation firms benefit from IPP, while IPP reduces the consumer surplus, producer surplus and social welfare. IPP increases the value of innovators. On the other hand, a subsidy to innovation is suggested. Further, the innovation input subsidy undertakes lower risk than the innovation output one.