Economics of Science and Technology
Jeffrey Parker, Reed College
Fall 2012
As with most courses, this reading list only scratches the surface of the interesting and relevant literature on each of the topics we discuss. If you are interested in additional readings, please contact the instructor or search for relevant topics on EconLit.
Many of the readings that are not from books are available on the Internet. Most of these will have links directly to the reading. Note that most of these are available through online subscriptions that can be accessed only if you are connecting through the Reed network.
Starred (*) readings are not required. They are listed for those who want further detail about aspects of the topic being covered.
Table of Contents
I. Knowledge, Innovation, and Productivity Growth
II. Innovation: Theories and Evidence
III. Intellectual Property and Innovation
IV. Issues in Technological Change
V. Technology Policy and National Systems of Innovation
I. Knowledge, Innovation, and Productivity Growth
A. Knowledge as an economic good (8/29)
- Foray,
Dominique. 2004. The Economics of Knowledge. Cambridge, Mass.: MIT
Press.
- Chapter 5: Knowledge Spillovers
- Chapter 6: Knowledge as a Public Good
-
Freeman, Chris,
and Luc Soete. 1997. The Economics of Industrial Innovation, 3rd ed.
Cambridge, Mass.: MIT Press.
-
Chapter 1: Introduction (Pay special attention to Tables 1-1 and 1-3 and the related text.)
-
B. The nature of innovation (8/31)
- Rosenberg, Nathan. 1979. Technological Interdependence in the American Economy. Technology and Culture 20 (1):25-50. Reprinted as Chapter 3 in N. Rosenberg, Inside the Black Box: Technology and Economics. Cambridge and New York: Cambridge University Press.
- Mokyr, Joel. 1990. The Lever of Riches: Technological Creativity
and Economic Progress, New York: Oxford University Press.
- Chapter 1: Introduction
- Petroski,
Henry. 1992. The Evolution of Useful Things, New York: Alfred Knopf.
- Chapter 4: From Pins to Paper Clips
C. Innovation and productivity growth (9/5)
- Maddison, Angus. 1994. Explaining the Economic Performance of Nations, 1820-1989. Chapter 2 in W.J. Baumol, R.R. Nelson, and E.N. Wolff, eds., Convergence of Productivity: Cross-National Studies and Historical Evidence, pp. 20-61.
- Baumol, William J. 2010. The Microtheory of Innovative Entrepreneurship. Princeton N.J.: Princeton University Press.
- Introduction and Chapter 1
- Hall, Bronwyn H. 2011. Innovation and Productivity. Cambridge, Mass.: National Bureau of Economic Research. NBER Working Papers, No. 17178.
D. Selected highlights from technological history
1. The Industrial Revolution (9/7)
- Mokyr. 1990. Lever of Riches.
- Chapter 5: The Years of Miracles: The Industrial Revolution, 1750-1830
- Freeman
and Soete. 1997. Economics of Industrial Innovation.
- Chapter 2: The Industrial Revolution.
- Mokyr, Joel. 2009. Intellectual Property Rights, the Industrial Revolution, and the Beginnings of Modern Economic Growth. American Economic Review 99 (2):349-355.
2. The 19th and 20th centuries (9/12)
- Mokyr.
1990. Lever of Riches.
- Chapter 6: The Later Nineteenth Century: 1830-1914.
- Mowery, David C., and Nathan Rosenberg. 1998.
Paths of Innovation: Technological Change in 20th-Century America, Cambridge
and New York: Cambridge University Press.
- Chapter 1: Introduction
- Chapter 2: The Institutionalization of Innovation, 1900-90.
- Chapter 6: The Electronics Revolution, 1947-90
- Mokyr, Joel. 1997. Are We Living in the Middle of an Industrial Revolution? Federal Reserve Bank of Kansas City Economic Review 82 (2):31-43.
II. Innovation: Theories and Evidence
A. Measuring innovative activity (9/14)
- Patel, Pari, and Keith Pavitt. 1995. Patterns of Technological Activity: Their Measurement and Interpretation. Chapter 2 in P. Stoneman, ed., Handbook of the Economics of Innovation and Technological Change, Blackwell. (An overview of some of the traditional methods of measuring innovation.)
- Trajtenberg, Manuel. 2002. A Penny for Your Quotes: Patent Citations and the Value of Innovations. Chapter 2 in A.B. Jaffe and M. Trajtenberg, eds., Patents, Citations, and Innovations: A Window on the Knowledge Economy. Cambridge, Mass.: MIT Press. (A discussion of one particular method: patent citations.)
- Alexopoulos,
Michelle. 2011. Read All about It!! What Happens after a Technology Shock? American Economic Review 101 (4):1144-79. (Note: This reading replaces the earlier Alexopoulos and Cohen paper that was listed on the reading list at the beginning of the semester.)
B. Microeconomic theory with innovation (9/17 [Ch 1-4] & 9/19 [Ch 5-7])
- Schumpeter, Joseph A. Capitalism, Socialism, and Democracy. New York: Harper & Row, 1950.
- Chapter VII. The Process of Creative Destruction
- Baumol. Microtheory of Innovative Entrepreneurship.
- Chapters 1 through 7
C. Diffusion of innovations (9/21)
- Cohen, Wesley M., and Daniel A. Levinthal. 1989. Innovation and Learning: The Two Faces of R&D. Economic Journal 99 (397):569-596.
- Robertson, Paul L., and Parimal R. Patel. 2007. New Wine in Old Bottles: Technological Diffusion in Developed Economies. Research Policy 36 (5):708-721.
- Nelson, Andrew J. 2009. Measuring Knowledge Spillovers: What Patents, Licenses and Publications Reveal about Innovation Diffusion. Research Policy 38 (6):994-1005.
- Students in Simulation Group A read this paper: Conley, Timothy G., and Christopher R. Udry. 2010. Learning about a New Technology: Pineapple in Ghana. American Economic Review 100 (1):35-69.
- Students in Simulation Group B read this paper: Spolaore, Enrico, and Romain Wacziarg. 2011. Long-Term Barriers to the International Diffusion of Innovations. Cambridge, Mass.: National Bureau of Economic Research. NBER Working Papers, No. 17271.
D. Uncertainty, risk, and strategies of investment in innovation
- Freeman and Soete. 1997. Economics of Industrial
Innovation. (9/24, both chapters)
- Chapter 10: Uncertainty, Project Evaluation, and Innovation (light reading for now)
- Chapter 11: Innovation and the Strategy of the Firm
- Note: Both of these chapters refer frequently to Project SAPPHO, which is discussed in Chapter 8. A brief skimming of Chapter 8 would be useful to help understand these references.
- Teece, David J. 1992. Strategies for Capturing the Financial Benefits from Technological Innovation. Chapter 7 in Technology and the Wealth of Nations, edited by N. Rosenberg, R. Landau, and D. Mowery, Stanford, Calif.: Stanford University Press. (9/26)
E. What kinds of firms and individuals innovate?
- Optional Reading: Syverson, Chad. 2011. What Determines Productivity? Journal of Economic Literature 49 (2):326-365.
- Jensen, Morten Berg, Björn Johnson, Edward Lorenz, and Bengt Åke Lundvall. 2007. Forms of Knowledge and Modes of Innovation. Research Policy 36 (5):680-693. (9/28)
- Arthur, W. Brian. 2007. The Structure of Invention. Research Policy 36 (2):274-287. (9/28)
- Freeman and Soete.
1997. Economics of Industrial Innovation.
- Chapter 9: Innovation and Size of Firm (10/1)
- Aghion,
Philippe, Nick Bloom, Richard Blundell, Rachel Griffith, and Peter Howitt.
2005. Competition
and Innovation: An Inverted-U Relationship. Quarterly Journal of Economics
120 (2): 701-728. (10/1)
- Goettler, Ronald L., and Brett R. Gordon. 2011. Does AMD Spur Intel to Innovate More? Journal of Political Economy 119 (6):1141-1200. (An interesting, but fairly mathematical, paper that is not required.)
- Rosenberg, Nathan. 1982. Inside the Black Box:Technology and Economics. Cambridge and New York: Cambridge University Press.
- Chapter 6: Learning by Using (10/3)
- Chapter 6: Learning by Using (10/3)
- von Hippel, Eric. 1988. The Sources
of Innovation. Oxford and New York: Oxford University Press.
- Chapters 2 through 5. (10/3)
- Lester,
Richard K., and Michael J. Piore. 2004. Innovation, The Missing Dimension.
Cambridge, Mass.: Harvard University Press. (10/5)
- Introduction
- Chapter 1: Integration in Cell Phones, Blue Jeans, and Medical Devices
- Chapter 2: Where Do Problems Come From?
- Chapter 3: Conversation, Interpretation, and Ambiguity
III. Intellectual Property and Innovation
A. Patents and trade secrets
- Scotchmer,
Suzanne. 2004. Innovation and Incentives. Cambridge, Mass.:
MIT Press. (10/22 - 10/26)
- Chapters 1-8
- De Saint-Georges, Matthis, and Bruno Van Pottelsberghe de la Potterie. 2011. A Quality Index for Patent Systems. London: Centre for Economic Policy Research. CEPR Discussion Papers, No. 8440. (Peruse this paper briefly to see the kinds of characteristics that vary across patent systems and how some of the major countries rank.) (10/26)
- Friedman, David D., William M. Landes, and Richard A. Posner. 1991. Some Economics of Trade Secret Law. Journal of Economic Perspectives 5 (1):61-72. (10/29)
- Cohen, Wesley M., Richard R. Nelson, and
John P. Walsh. 2000. Protecting
Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing
Firms Patent (or Not). Cambridge, Mass.: National Bureau of Economic Research.
NBER Working Papers, No. 7552. (10/29)
- Moser, Petra. 2005. How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World's Fairs. American Economic Review 95 (4):1214-36. (10/31)
- Lerner, Josh.
2009. The
Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues.
American Economic Review 99 (2):343-348. (10/31)
- Lerner,
Josh, and Julie Wulf. 2007. Innovation
and Incentives: Evidence from Corporate R&D. Review of Economics and
Statistics 89 (4):634-644. (10/31)
- Furman, Jeffrey L., and Scott Stern. 2011. Climbing atop the Shoulders of Giants: The Impact of Institutions on Cumulative Research. American Economic Review 101 (5):1933-1963. (10/31)
B. Problems with the Current U.S. Patent System
- Jaffe,
Adam B., and Josh Lerner. 2004. Innovation and Its Discontents: How Our
Broken Patent System Is Endangering Innovation and Progress, and What to Do about
It. Princeton, N.J.: Princeton University Press.
- Chapters 1-4, and 7. (11/2 & 11/5)
- Reitzig, Markus, Joachim Henkel, and Christopher Heath. 2007. On Sharks, Trolls, and their Patent Prey---Unrealistic Damage Awards and Firms' Strategies of "Being Infringed." Research Policy 36 (1):134-154. (11/5)
- Hall,
Bronwyn H. 2009. Business
and Financial Method Patents, Innovation, and Policy. Cambridge, Mass.: National
Bureau of Economic Research. NBER Working Papers, No. 14868. (11/5)
- Boldrin, Michele, and David K. Levine. 2008. Against Intellectual Monopoly. New York: Cambridge University Press. (11/7)
- Chapter 1: Introduction
- Chapter 3: Innovation under Competition
- Chapter 4: The Evil of Intellectual Monopoly
- Gilbert, Richard. 2011. A World without Intellectual Property? A Review of Michele Boldrin and David Levine's Against Intellectual Monopoly. Journal of Economic Literature 49 (2):421-432. (11/7)
C.
The Anti-Commons Hypothesis (11/9)
- Heller, Michael A., and Rebecca S. Eisenberg. 1998. Can Patents Deter Innovation? The Anticommons in Biomedical Research. Science, New Series, 280 (5364):698-701.
- Murray, Fiona, and Scott Stern. 2006. When Ideas Are Not Free: The Impact of Patents on Scientific Research. Innovation Policy and the Economy 7:33-69.
- Walsh, John P., Wesley M. Cohen, and Charlene Cho. 2007. Where Excludability Matters: Material versus Intellectual Property in Academic Biomedical Research. Research Policy 36 (8):1184-1203.
D. The Economics of Open-Source Software (11/12)
- Lerner, Josh, and Jean Tirole. 2002. Some Simple Economics of Open Source. Journal of Industrial Economics 50 (2):197-234.
- Roberts, Jeff, Il-Horn Hann, and Sandra Slaughter. 2006. Understanding the Motivations, Participation and Performance of Open Source Software Developers: A Longitudinal Study of the Apache Project. Management Science 52 (7):984-999.
- *Fershtman, Chaim, and Neil Gandal. 2011. A Brief Survey of the Economics of Open Source Software. London: Centre for Economic Policy Research. CEPR Discussion Papers, No. 8434. (This is not required, but has useful and up-to-date references for anyone interested in reading more.)
IV. Issues in Techological Change
A. Path Dependence: Examples and Counterexamples
- David, Paul A. 1985. Clio and the Economics of QWERTY American Economic Review 75 (2):332-337. (11/14)
- Liebowitz, S. J., and Stephen E. Margolis. 1990. The Fable of the Keys Journal of Law and Economics 33 (1):1-25. (11/14)
- Arthur,
W. Brian. 1994. Increasing Returns and Path Dependence in the Economy,
Ann Arbor, Mich.: University of Michigan Press. (11/16)
- Chapter 1: Positive Feedbacks in the Economy
- Chapter 2: Competing Technologies, Increasing Returns, and Lock-In by Historical Small Events
November 19: Class visit with Dr. Roger Perlmutter
B.
Networks, Standards, and Externalities (11/21)
- Katz, Michael L., and Carl Shapiro. 1994. Systems Competition and Network Effects Journal of Economic Perspectives 8 (2):93-115.
- Besen, Stanley M., and Joseph Farrell. 1994. Choosing How to Compete: Strategies and Tactics in Standardization Journal of Economic Perspectives 8 (2):117-131.
- Liebowitz, S. J., and Stephen E. Margolis. 1994. Network Externality: An Uncommon Tragedy Journal of Economic Perspectives 8 (2):133-150.
- Basker, Emek. 2012. Raising the Barcode Scanner: Technology and Productivity in the Retail Sector. American Economic Journal: Applied Economics 2 (3):1-27.
C. Financing Innovation: Venture Capital (11/26)
- Berlin, Mitchell. 1998. That Thing Venture Capitalists Do. Federal Reserve Bank of Philadelphia Business Review January/February:15-26.
- Gompers, Paul A., and Josh Lerner. 2001. The Money of Invention:
How Venture Capital Creates New Wealth. Cambridge: Mass.: Harvard Business
School Press.
- Chapters 2-6.
- Optional Reading: Da Rin, Marco, Thomas F. Hellmann, and Manju Puri. 2011. A Survey of Venture Capital Research. Cambridge, Mass.: National Bureau of Economic Research. NBER Working Papers, No. 17523. (This is a very recent update of the literature on venture capital. It is too long to read, but will be a useful reference for anyone who wants to learn about the current state of VC research.)
November 26: Talk by Andrew Nelson, 4pm, GCC Room D
- Agarwal, Ajay, and Rebecca Henderson. 2002. Putting Patents in Context: Exploring Knowledge Transfer from MIT. Management Science 48 (1):44-60.
- Nelson, Andrew. 2012. Putting University Research in Context: Assessing Alternative Measures of Production and Diffusion at Stanford. Research Policy 41 (4): 678-691.
- Lane, Julia. 2010. Let's Make Science Metrics More Scientific. Nature 464 (7288):488-489.
- Additional Optional Reading: Nelson, Andrew, et al. 2012. Obliteration, Symbolic Adoption, and Other Finicky Challenges in Tracking Innovation Diffusion.
D. Technological Change and the Labor Market (11/28)
- Goldin, Claudia, and Lawrence F. Katz.
2008. The Race Between Education and Technology. Cambridge, Mass.: Belknap
Press of Harvard University Press.
- Chapter 2: Inequality across the Twentieth Century
- Chapter 3: Skill-Biased Technological Change
- Acemoglu, Daron. 2002. Technical Change, Inequality, and the Labor Market. Journal of Economic Literature 40 (1):7-72.
- Beaudry, Paul, Mark Doms, and Ethan Lewis. 2010. Should the Personal Computer Be Considered a Technological Revolution? Evidence from U.S. Metropolitan Areas. Journal of Political Economy 118 (5):988-1036.
E. International Technology Transfer, Trade, and Economic Development
- Krugman, Paul. 1995. Technological Change in International Trade. Chapter 9 in Handbook of the Economics of Innovation and Technological Change, edited by P. Stoneman. Blackwell Handbooks in Economics. (11/30)
- World
Development Report 1998/99: Knowledge for Development, Washington,
D.C: World Bank. (Available online through worldbank.org if the link does not
work.) (11/30)
- Chapters 1 through 4.
- Caselli, Francesco, and John Coleman. 2001. Cross-Country Technology Diffusion: The Case of Computers. American Economic Review 91 (2):328-335. (12/3)
- Comin, Diego, and Bart Hobijn. 2004. Cross-Country Technology Adoption: Making the Theories Face the Facts. Journal of Monetary Economics 51 (1):39-83. (12/3)
- Comin, Diego, William Easterly, and Erick Gong. 2010. Was the Wealth of Nations Determined in 1000 BC? American Economic Journal: Macroeconomics 2 (3):65-97. (12/3)
V. Technology Policies and National Systems of Innovation
- Mokyr. 1990. Lever of Riches. (12/5)
- Chapter 7: Understanding Technological Progress
- Nelson, Richard R. 2008. What Enables Rapid Economic Progress: What Are the Needed Institutions? Research Policy 37 (1):1-11. (12/5)
- Mowery, David C., and Nathan Rosenberg. 1993. The U.S. National Innovation System. Chapter 2 in National Innovation Systems, edited by R. R. Nelson. Oxford and New York: Oxford University Press.
- Economic
Report of the President, February 2005
- Chapter 6: Innovation and the Information Economy
- Farrell, Joseph, et al. 2005. Reviews of the 2005 Economic Report of the President. Journal of Economic Literature 43 (3):801-822. (Read pp. 801-805 only, covering Chapter 6.)
- Liu, Feng-Chao, Denis Fred Simon, Yu-Tao Sun, and Cong Cao. 2011. China's Innovation Policies: Evolution, Institutional Structure, and Trajectory. Research Policy 40 (7):917-931.
- *Steil, Benn, David G. Victor, and Richard R. Nelson, eds. 2002. Technological Innovation and Economic Performance. Princeton, N.J.: Princeton University Press. (Chapters 3-8 describe the recent innovation performances of the U.S., Japan, Germany, France, the U.K., and the Nordic countries.)
- *Nelson, Richard R., ed. 1993. National Innovation Systems: A Comparative Analysis. Oxford: Oxford University Press. (Contains chapters describing the national innovation systems of many countries.)
- *There is a whole series of books (in the Reed Library) called Economic Development of XX since 1870, where XX is a country. You are encouraged to look at these for specific information on innovation policies in particular countries. See also a series of articles in the February 2002 issue of Research Policy.