UCL - Economics of Innovation

[LSMS2041]

[30h] 5 credits

This course is taught in the 1st semester.

Teacher(s): Paul Belleflamme

Language: English

Level: Second

Aims
Main themes
Content and teaching methods
Other information (prerequisite, evaluation (assessment methods), course materials recommended readings, ...)

Aims

At the end of the course, students should understand (i) what sets innovation markets apart from other markets, (ii) why markets often fail when it comes to produce information and knowledge, and (iii) why and how governments should intervene in such markets. Students should also be able to use the economic analysis in order to improve their understanding of a number of topical issues (e.g., the impact of patents and generic drugs on the fight against diseases like HIV/AIDS or malaria, software patents, piracy of digital goods, etc).

Main themes

The course aims at analysing the mechanisms and institutions governing the production, use and diffusion of information and knowledge. It also aims at developing a rigorous economic analysis of a large set of issues surrounding intellectual property, R&D and innovation. In this field, the economic approach appears as fundamental as it focuses on markets, incentives and strategic interaction.

Content and teaching methods

Summary, content and methods
1. We introduce the main concepts and explain why activities generating information and knowledge are marred by three sources of market failures, which contribute to create a generic problem of appropriability.
2. We compare various public policy measures that are designed to alleviate this problem of appropriability.
3. We assess the effect of market structure on the incentives for R&D.
4. We study how patent protection should optimally be designed. In particular, we address the questions of the optimal length and breadth of patents.
5. We apply the previous general analyses to the specificities of the digital economy. Two topical issues are addressed: the piracy of digital products and the development of open-source software.

Content
Information and appropriability
Market structure and incentives for R&D
Patents and efficiency
Intellectual property in the digital economy

Methods
The theoretical material is presented during the lectures. Students are asked to work in groups in order to apply the theoretical framework to specific case studies and/or to topical issues.

1 Lectures
1 Interactive seminar
1 Micro-teaching (partly presented by students)

At home activities
1 Readings to prepare the lecture
1 E-learning
1 Paper work
1 Students presentation

Other information (prerequisite, evaluation (assessment methods), course materials recommended readings, ...)

Other information

Prerequisites
Intermediate Micro-Economics and Introductory Industrial Organization

Evaluation:
Class participation and oral examination, in French or English

Support:
Lecture notes and Slides provided through icampus

References:
Provided during the class

Internationalisation
1 international content (does the course tackle international issues related to the course content ?)
1 international case study

Skills
1 presentation skills
1 writing skills
1 team work
1 individual autonomy
1 time management
1 project management
1 critical thinking
1 assertiveness

Techniques and tools for teaching and learning
1 Internet work
1 modelling
1 quantitative methods
1 mathematics