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Showing posts with the label patent buyout

Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Kremer, Patent Buyout and Innovation

The world continues to combat the Wuhan virus unleashed by China. The world at the moment grapples with two problems. The first is the efforts to discover a vaccine or a cure for the COVID-19 and the consequent distribution of the same to the global population. Secondly, it is to revive the economy which is suffering the lockdown. Theorists from Schumpeter onwards have viewed the restarting the economy being possible only through innovation. As the economy struggles, it is the new innovation that infuses life into the economy and enables it to build on the V shaped or U shaped or whatever shape the curve might posit itself to be.   Yet in the twin challenges that the society finds itself confronted with, lies a commonality and a challenge so as to speak. It is about innovation and protection of innovation and consequent prospect of monopolizing the innovation. Take the instance of a prospective discovery of vaccine or cure for the Chinese virus. The firm engaged in the discovery wo