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Economics of Innovation (ECON30027)
Undergraduate level 3Points: 12.5Not available in 2017
Overview
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Innovation is one of the main sources of economic development. Improving their innovative capacity is a major challenge for countries in both the developed and developing world. The key questions in the economics of innovation as a field are which innovations to encourage, how to reward them, and how to encourage their diffusion. This subject considers the different methods for rewarding innovation, such as prizes, intellectual property, and contests. We will study formal microeconomic models analysing the advantages and disadvantages of each method in the creation of knowledge. As an example, we will analyse how encouraging investment in neglected diseases, such as malaria and tuberculosis, may be different from encouraging investment in mobile technologies. The benefits of public vs. private sponsorship will also be investigated. In the case of intellectual property, we will evaluate what the available tools of protection are and how they meet the challenges posed by the cumulative nature of innovation. Our discussion will include different innovative environments, ranging from open source communities to research joint ventures. Finally, we will consider how the domains of intellectual property protection and antitrust policy may complement and contradict each other. Throughout the course, our discussion will be guided by practical examples and case studies. We will tackle some contemporary policy questions, such as whether genes should be patented.
Intended learning outcomes
On successful completion of this subject, students should be able to:
- identify the market failures which characterize innovative environments;
- describe the main models economists have developed to analyse optimal reward structures for the creation of knowledge;
- describe the differences between different ways of rewarding innovation (patens, contests, prizes, etc.);
- identify the virtues of decentralized vs. centralized decision-making in innovative environments;
- describe the policy challenges posed by the cumulative nature of innovation;
- identify the different ways of measuring innovative activity;
- describe the legal tools we have for rewarding innovation and shortcomings
- Apply the theory of economic policy and business decision making;
Generic skills
- High level of development: evaluation and synthesis of ideas, views and evidence critical thinking, strategic thinking, problem-solving skills; written communication.
- Moderate level of development: Oral communication; accessing economic and other information; collaborative learning and team work.
Last updated: 27 April 2024
Eligibility and requirements
Prerequisites
The following:
Code | Name | Teaching period | Credit Points |
---|---|---|---|
ECON20002 | Intermediate Microeconomics |
Summer Term (On Campus - Parkville)
Semester 1 (On Campus - Parkville)
|
12.5 |
Corequisites
None
Non-allowed subjects
None
Recommended background knowledge
Please refer to Prerequisites and Corequisites.
Inherent requirements (core participation requirements)
The University of Melbourne is committed to providing students with reasonable adjustments to assessment and participation under the Disability Standards for Education (2005), and the Assessment and Results Policy (MPF1326). Students are expected to meet the core participation requirements for their course. These can be viewed under Entry and Participation Requirements for the course outlines in the Handbook.
Further details on how to seek academic adjustments can be found on the Student Equity and Disability Support website: http://services.unimelb.edu.au/student-equity/home
Last updated: 27 April 2024
Assessment
Additional details
- A 2-hour end-of-semester examination (50% or 60%)
- A 1-hour mid-semester exam (20% or 30%)
- An in-course assignment of 2000 words (20%).
- The final mark will be calculated by weighting the end-of-semester exam at 50% and the mid-semester exam at 30% OR by weighting the end-of-semester exam at 60% and the mid-semester exam at 20%, whichever gives the higher mark to the student.
Last updated: 27 April 2024
Dates & times
Not available in 2017
Time commitment details
170 Hours
Last updated: 27 April 2024
Further information
- Texts
Prescribed texts
Scotchmer, S., Innovation and Incentives, 2004, MIT Press
- Related Handbook entries
This subject contributes to the following:
Type Name Major Economics - Breadth options
This subject is available as breadth in the following courses:
Last updated: 27 April 2024