ECON 318 Syllabus
Spring 2010, Prof. Christiaan Hogendorn
Course policies webpage
Connotea Page
Checked readings are required, unchecked readings are background to lecture.
Scotchmer = Suzanne Scotchmer, Innovation and Incentives, 2004.

I. Introduction

1. Organization and Production Functions
Scotchmer, Preface

2. Schumpeterian Competition
Icebreakers
Nakamura, Leonard, Economics and the New Economy: The Invisible Hand Meets Creative Destruction, Business Review Federal Reserve Bank of Philadelphia, July/August 2000. pp. 15-30.
Nelson, Richard, "Schumpeter and Contemporary Research on the Economics of Innovation," Chapter 3 in The Sources of Economic Growth, Harvard University Press, 1996: 87-99.
Baumol, William, Chapter 3 in The Free Market Innovation Machine, Free Press, 2002.
*Kohn, Meir, and John Scott, "Scale Economies in Research and Development: The Schumpeterian Hypothesis," Journal of Industrial Economics, Vol. 30, No. 3, March, 1982, pp. 239-249.
 
3. Market Failures
*Arrow, Kenneth, "Economic Welfare and the Allocation of Resources for Invention," in Richard Nelson, ed., The Rate and Direction of Inventive Activity, Princeton University Press, 1962, pp. 609-625. (*Chris, Nate)
*Scotchmer, Chapter 2.
 
4. Network Externalities
Jeffrey Rohlfs, "Early Telephone" and "VCRs," Chapters 7 and 10 in Bandwagon Effects, MIT Press, 2001. (AJ, Anthony)
*Scotchmer, Chapter 10
 
II. Technological Revolutions

5. The Revolution Paradigm
Nef, J. U., "Coal Mining and Utilization," Chapter 3 in Volume III of Singer et al, eds., A History of Technology, OUP, 1957. (Brandon, Lily)
Scotchmer, Chapter 1
Mokyr, Joel, "The Industrial Revolution and Beyond," Chapter 3 in The Gifts of Athena, Princeton University Press, 2002: 78-118.
Mokyr, Joel, "Innovation in an Historical Perspective: Tales of Technology and Evolution," Chapter 2 in Steil, Benn, David Victor, and Rochard Nelson, eds., Technological Innovation and Economic Performance, Princeton University Press, 2002: 23-46.
Bresnahan, Timothy, and M. Trajtenberg, "General Purpose Technologies 'Engines of Growth'?" Journal of Econometrics, Vol. 65, 1995, pp. 83-108.
David, Paul, "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review Papers and Proceedings, 80(2), 1990: 355-361.
DeLong, J. Bradford, and Lawrence Summers, "The 'New Economy': Background, Historical Perspective, Questions, and Speculations," in Economic Policy for the Information Economy Federal Reserve Bank of Kansas City, 2001, pp. 11-63.

6. The Industrial Revolution
Koehn, Nancy, "Josiah Wedgwood and the First Industrial Revolution," Chapter 2 in Thomas McCraw, ed., Creating Modern Capitalism, Harvard University Press, 1995. (Ben, Duc)

Rosenberg, Nathan, "The Historiography of Technical Progress," Chapter 1 in Inside the Black Box: Technology and Economics, Cambridge University Press, 1982: 3-33.
Ashton, T. S., The Industrial Revolution: 1760-1830, Oxford University Press, 1948.

7. Inequality, Discontent, Marx
Boyer, George "The Historical Background of the Communist Manifesto," Journal of Economic Perspectives, 12(4), 1998: 151-174. (Arran, Baomie)
William Blake, "And Did Those Feet in Ancient Time," preface to Milton, 1808. (source of the line "dark Satanic mills")
Rosenberg, Nathan, "Marx as a Student of Technology," Chapter 2 in Inside the Black Box: Technology and Economics, Cambridge University Press, 1982: 34-54.
Ashton, T. S., "Capital and Labour," Chapter 4 in The Industrial Revolution: 1760-1830, Oxford University Press, 1948: 94-126.

8. The Second Industrial Revolution
Chandler, Alfred, "Creating Organizational Capabilities: The Great Industries [of Germany]," Chapter 12 in Scale and Scope: the Dyanimics of Industrial Capitalism, Harvard University Press, 1990: 456-502. (Erwin, Gilder)
Rosenberg, Nathan, "Technological Interdependence in the American Economy," Chapter 3 in Inside the Black Box: Technology and Economics, Cambridge University Press, 1982.
Nye, David, "Flexible Factory," Chapter 5 in Electrifying America, MIT Press, 1990: 185-237.
Fear, Jeffrey, "German Capitalism," Chapter 5 in McCraw, Thomas, ed., Creating Modern Capitalism, Harvard University Press, 1995: 133-182.
Perelman, Michael, "Retrospectives: Fixed Capital, Railroad Economics and the Critique of the Market," Journal of Economic Perspectives, 8(3), 1994: 189-195.

9. The ICT Revolution
Mowery, David and Timothy Simcoe, "Is the Internet a US invention?—an economic and technological history of computer networking," Research Policy, 31, 2002. (Phaedra, Sean)
Olegario, Rowena, "IBM and the Two Thomas J. Watsons," Chapter 10 in Thomas McCraw, ed., Creating Modern Capitalism, Harvard University Press, 1995.
Langlois, Richard "Computers and Semiconductors," Chapter 10 in Steil, Benn, David Victor, and Rochard Nelson, eds., Technological Innovation and Economic Performance, Princeton University Press, 2002: 265-284.
Nelson, Richard, "The Link Between Science and Invention: The Case of the Transistor," Chapter 7 in The Sources of Economic Growth, Harvard University Press, 1996.

III. Finance and Investment

10. Entrepreneurship
*Murphy, Kevin, Andrei Shleifer, and Robert Vishny, "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, 106(2), 1991: 503-530. (*Micah, Tom)
Gordon Moore and Kevin Davis, "Learning the Silicon Valley Way," chapter 2 in Bresnahan and Gambardella, eds., Building High-Tech Clusters : Silicon Valley and Beyond, 2004: 7-39.
Baumol, William, Chapter 5 in The Free Market Innovation Machine, Free Press, 2002.
 
11. Design of Intellectual Property
*Scotchmer, Chapter 4, Section 4.0-4.3. (*Presentation)
Kamien, Morton, and Nancy Schwartz, "Schumpeterian Hypotheses," Chapter 2 in Market Structure and Innovation, Cambridge University Press, 1982: 22-48.
Scotchmer, Chapter 4, Sections 4.4-4.7
 
12. Public Support of R&D
*Gelabert, Fosfuri, and Tribó. "Does the Effect of Public Support for R&D Depend on the Degree of Appropriability?" The Journal of Industrial Economics 57(4): 736-767. (*Presentation)
Baumol, Chapter 9 and 10.
Berndt, Ernst, "Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price," Journal of Economic Perspectives, 16(4), 2002: 45-66.
Kremer, Michael, "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, 16(4), 2002: 67-90
Teece. Profiting from technological innovation: Implications for integration, collaboration, …. Research policy (1986)

SPRING BREAK
 
13. Finance and Bubbles
*Pástor and Veronesi. Technological revolutions and stock prices. American Economic Review (2009) (*Carlos, Nate)
*Jovanovic, Boyan and Peter Rousseau, "Mergers as Reallocation," NBER Working Papers 9279, 2002.
Perez, Carlota, "Financial Capital and Production Capital," Chapter 7 in Technological Revolutions and Financial Capital, Edward Elgar, 2002: 71-80.
Perez, Carlota, "The Sequence and its Driving Forces," Chapter 14 in Technological Revolutions and Financial Capital, Edward Elgar, 2002: 151-158.
 
14. Technology Presentations
 
IV. Commons

15. Intellectual Property
Carl Shapiro, 2001, “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting,” in Jaffe, A.B., Lerner, J., and Stern, S. (eds.), Innovation Policy and the Economy, 1, 2001, pp. 119-150. (Micah, Tom)

Scotchmer, Chapter 3
 
16. Technology Sharing and Consortia
Scotchmer, Chapter 6 (*Arran, Baomie)
*Lars-Hendrik Roller, Ralph Siebert and Mihkel M. Tombak, “Why Firms Form (or do not Form) RJVs,” The Economic Journal, 117: 1122-1144.
*Josh Lerner, Marcin Strojwas and Jean Tirole, “The Design of Patent Pools: The Determinants of Licensing Rules,” Rand Journal of Economics, forthcoming
*Baumol, Chapter 13.
 
17. Cumulativeness and Externalities
*Green and Scotchmer. "On the division of profit in sequential innovation." The RAND Journal of Economics (1995) (*AJ, Anthony)
Scotchmer, Chapter 5
 
18. Clusters, Spillovers, External Economies
*Cabral and Wang. Spin-offs: theory and evidence. Kansas City Fed working paper. (*Erwin, Gilder)
Timothy Bresnahan and Alfonso Gambardella, "Old-Economy Inputs for New-Economy Outcomes : What Have We Learned?" chapter 2 in Bresnahan and Gambardella, eds., Building High-Tech Clusters : Silicon Valley and Beyond, 2004: 331-358.
Buzard, Kristy, and Carlino, Gerald, "The Geography of Research and Development Activity in the U.S." Federal Reserve Bank of Philadelphia Business Review, Third Quarter 2008.
Catherine de Fontenay and Erran Carmel, “Israel’s Silicon Wadi: The Forces Behind Cluster Formation,” Chapter 3 in Timothy Bresnahan and Alfonso Gambardella, eds., Building High Tech Clusters, Cambridge, 2004.
 
19. Compatibility and Standards
*Arthur, W. Brian, "Competing Technologies, Increasing Returns, and Lock-in by Historical Events," Economic Journal, 99(1), 1989: 116-131. (*Brandon, Lily)
Thomas Eisenmann, Geoffrey Parker, Marshall Van Alstyne, "Platform Envelopment," SSRN working paper, 2007.
Bresnahan, Timothy, and Shane Greenstein, "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, 47(1), 1999: 1-40.
Puffert, Douglas, "The Standardization of Track Gauge on North American Railways, 1830-1890," The Journal of Economic History, Vol. 60, No. 4, December 2000, pp. 933-960.
*Cremer, Jacques, Patrick Rey, and Jean Tirole, "Connectivity on the Commercial Internet," Journal of Industrial Economics, Vol. 48, No. 4, December 2000, pp. 433-472. (Only read through the end of section IV.)
 
20. Open Source
Raymond, Eric, The Cathedral and the Bazaar: Musings on Linux and Open Source by an Accidental Revolutionary, Chapter 2 "A Brief History of Hackerdom" and Chapter 3 "The Cathedral and the Bazaar." (Carlos, Chris)
*Josh Lerner and Jean Tirole, "Some Simple Economics of Open Source," Journal of Industrial Economics, 50(2), 2002: 197-234.
Josh Lerner and Jean Tirole, "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, 19(2), 2005: 99-120.
Yochai Benkler, “Some Basic Economics of Information Production and Innovation,” “Peer Production and Sharing,” and “The Economics of Social Production,” Chapters 2, 3, and 4 in The Wealth of Networks, Yale University Press, 2006.

V. Macroeconomic Growth

21. Growth Theory
*Scotchmer, Chapter 9 (*Phaedra, Sean)
*Baumol, Chapter 15, especially appendix on Cost Disease.

22. Growth Empirics
*Dale Jorgenson, "Information Technology and the U.S. Economy," American Economic Review, 91(1), 2001: 1-32. (*Ben, Duc)
 
23. Feedback and Cardwell's Law
*Arnold C. Harberger, "A Vision of the Growth Process," American Economic Review, March, 1998: 1-32. (*Presentation)
Mokyr, Joel, "The Political Economy of Knowledge: Innovation and Resistance in Economic History," Chapter 6 in The Gifts of Athena, Princeton University Press, 2002: 78-118.
Baumol, Chapter 16.

VI. Perspectives on Technologies

Technology Presentations 1
Social Media (Erwin, etc.)
Wireless power (AJ, Anthony, Micah, Tom)

Technology Presentations 2

Technology Presentations 3 / Conclusion