Standards and the Incentives for Innovation

27 Pages Posted: 3 Apr 2013

See all articles by Troy J. Scott

Troy J. Scott

RTI International

John T. Scott

Dartmouth College - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 18, 2013


We model the economics of the effects of standards on incentives for innovative investment. We use survey data from industrial respondents to parameterize our model, allowing us to explain and predict effects of technology standards on investment in the development of technology and thereby assess the benefits and costs of technology standards in a market equilibrium setting. Having parameterized the model with the responses of industry to our survey, we can also describe the differences in effects of standards for different types of firms and for different types of industrial research, and we can simulate the effects of stronger or weaker intellectual property (IP) protection, using the industrial responses to answer the question of how the opposing effects from changes in IP protection on balance affect innovative investments. We find that the net effects of standards for IP protection are positive, increasing innovative investments and increasing their private and social value.

Keywords: standards, innovation, standards setting organizations (SSOs), research and development (R&D), national laboratories

JEL Classification: O31, O33, O34, O38

Suggested Citation

Scott, Troy J. and Scott, John T., Standards and the Incentives for Innovation (January 18, 2013). Available at SSRN: or

Troy J. Scott (Contact Author)

RTI International ( email )

PO Box 12194
Research Triangle Park, NC 27709
United States

John T. Scott

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States

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