This article is based on the first chapter of my PhD dissertation at the Toulouse School of Economics. An earlier version of this and a companion paper (Schuett, in press) was circulated under the title “Inventors and Impostors: An Economic Analysis of Patent Examination.” I am indebted to my advisor Jean Tirole for his support and guidance. I am also grateful to David Martimort (the coeditor) and two anonymous referees, whose detailed comments have greatly improved the article. In addition, for their helpful comments and suggestions, I thank Cédric Argenton, Jan Boone, Jing-Yuan Chiou, Pascal Courty, Vincenzo Denicolò, Guido Friebel, Elisabetta Iossa, François Salanié, Mark Schankerman, Christoph Schottmüller, Paul Seabright, Emanuele Tarantino, Eric van Damme participants at the EVPAT summer school in Bologna (2008), “Knowledge for Growth” conference in Toulouse (2008), congress of the European Economic Association in Milan (2008), EARIE conference in Toulouse (2008), EPIP conference in Bern (2008), ASSET conference in Florence (2008), as well as seminar participants at the Toulouse School of Economics, European University Institute, University of Alicante, Ludwig Maximilian University Munich, Centre for European Economic Research (ZEW), University of Vienna, Australian National University, and Tilburg University. All errors are mine. Financial support from the Seventh European Community Framework Programme through a Marie Curie Intra-European Fellowship (grant PIEF-GA-2010-275032) is gratefully acknowledged.
Patent quality and incentives at the patent office
Article first published online: 18 JUN 2013
© 2013, RAND.
The RAND Journal of Economics
Volume 44, Issue 2, pages 313–336, Summer 2013
How to Cite
Schuett, F. (2013), Patent quality and incentives at the patent office. The RAND Journal of Economics, 44: 313–336. doi: 10.1111/1756-2171.12021
- Issue published online: 18 JUN 2013
- Article first published online: 18 JUN 2013
- Seventh European Community Framework
- Marie Curie Intra-European Fellowship. Grant Number: PIEF-GA-2010-275032
Patent examination is a problem of moral hazard followed by adverse selection: examiners must have incentives to exert effort, but also to truthfully reveal the evidence they find. I develop a theoretical model to study the design of incentives for examiners. The model can explain the puzzling compensation scheme in use at the U.S. patent office, where examiners are essentially rewarded for granting patents, as well as the variation in compensation schemes and patent quality across patent offices. It also has implications for the retention of examiners and for administrative patent review.