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 answers is correct.

Question

Quizplus · Accepted Answer

Without patents, firms would not have exclusive rights to their innovations and may not be adequately incentivized to invest resources in developing new technologies or products. This could result in a lack of innovation overall, as firms may not see the potential returns as justifying the initial investment. They may also be hesitant to invest in innovations if they believe that competitors could easily copy their work and benefit from it without bearing the development costs.

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