The Role of Patents for Bridging the Science to Market Gap

This paper examines an ex-post rationale for the patenting of scientific discoveries. In this model,
scientist do not know which firms can make use of their discoveries, and firms do not know which
scientific discoveries might be useful to them. To bridge this gap, either or both sides need to engage
in costly search activities. Patents determine the appropriability of scientific discoveries, which
affects the scientists. and firms. willingness to engage in search. Patents decrease dissemination
when the search intensity of firms is sufficiently elastic, relative to that of scientists. The model also
examines the role of universities. Patents facilitate the delegation of search activities to the
universities' technology transfer offices, which enables efficient specialization. Rather than
distracting scientists from doing research, patenting may be a complement to doing research.