Game theory suggests that,in the absence of patents,the privately motivated innovation decisions of firms might lead to:
A) too little innovation.
B) too much innovation.
C) the socially efficient level of innovation.
D) None of the preceding answers is correct.

Question

Quizplus · Accepted Answer

Without patents, firms may not have sufficient incentives to invest in research and development since they would not have legal protection over their innovations. As a result, there may be too little innovation in the market. Therefore, option A is the best choice.

Game Theory Suggests That,in the Absence of Patents,the Privately Motivated