Patent Licensing and the Research University

35 Pages Posted: 27 Sep 2004 Last revised: 26 May 2021

See all articles by Richard A. Jensen

Richard A. Jensen

University of Notre Dame - Department of Economics

Marie C. Thursby

Georgia Institute of Technology - Strategic Management Area; National Bureau of Economic Research (NBER)

Date Written: September 2004

Abstract

We construct a dynamic model of university research that allows us to examine recent concerns that financial incentives associated with university patent licensing are detrimental to the traditional mission of US research universities. We assume a principal-agent framework in which the university administration is the principal and a faculty researcher is the agent. Whether or not the researcher remains in the university, and if so her choice of the amount of time to spend on basic and applied research, is complicated by the fact that she earns license income and prestige both inside and outside the university. Thus in contrast to usual principal agent models the participation constraint is endogenous. This, plus the fact that current research affects future knowledge stocks, allows us to show that it is far from obvious that licensing will damage basic research and education.

Suggested Citation

Jensen, Richard A. and Thursby, Marie C., Patent Licensing and the Research University (September 2004). NBER Working Paper No. w10758, Available at SSRN: https://ssrn.com/abstract=590773

Richard A. Jensen

University of Notre Dame - Department of Economics ( email )

Notre Dame, IN 46556
United States

Marie C. Thursby (Contact Author)

Georgia Institute of Technology - Strategic Management Area ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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