What Drives Scientific Disclosure

8/14/2019 What Drives Scientific Disclosure

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Disclosure Strategy

In a world where cumulative knowledge accumulation is

efficient, what are the incentives for scientists and firms to

disclose knowledge through publication?

How do disclosure incentives interact with intellectualproperty protection, scientific rewards and conditions of

public funding?


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Literature

Sociology of science

Merton (1963)

Stokes (1996)

Economics of innovation

Rosenberg

Dasgupta & David

Romer (1990)

Recent work

Aghion, Dewatripont and Stein (2005)


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Key elements

Many ideas have both scientific merit and commercial

application

Disclosure is a strategic choice of scientists and

funders/firms

Scientists are motivated towards openness

Funders preferences are driven by their time horizon

Determines ability to consider and appropriate the returns

from cumulative knowledge acquisition.


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Taxonomy of Projects

Immediate usefulness

Low High

Scientific

Merit

High

Low

From Stokes (1996)


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Taxonomy of Projects

Immediate usefulness

Low High

Scientific

Merit

High Bohr Pasteur

Low Steorn Edison

From Stokes (1996)


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Disclosure

Disclosure mechanisms

Publication

Patenting

Four strategies

Secrecy

Commercial Science (patent only)

Open Science (publish only)

Patent-paper pairs (both but with publication after idea

generation and managed so as to not create prior art claim;

less than 12 months)


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Patent-Paper Pairs

Patenting and publication are notmutually exclusive.

Arise in Pasteurs Quadrant

Important phenomenon in the life sciences (& beyond)

many of the major breakthroughs are disclosed as patent-paper pairs including:

recombinant DNA techniques (Cohen et al., 1973),

transgenic mouse prone to cancerthe Oncomouse (Stewart

et al. 1984),

RNA interference (Zamore et al. 2000),

human embryonic stem cells (Thomson et al. 1998).


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PPP Examples I

# papers# paired with

patents

% paired

publications

Publications by public sector funded

researchers

235 106 45%

Publications by public and private

sector funded researchers70 41 59%

Publications by private sector funded

researchers 36 24 67%

Starting with publications: From a sample of 341 research publications (all the

research articles from the leading life science journalNature Biotechnology between

1997 and 1999). Examine which publications are also disclosed in patents. (Murray

and Stern 2007)


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PPP Examples II

# patents# paired with

publications

% paired

patents

Patents by public sector funded

researchers

1308 1099 84%

Patents by public and private sector

funded researchers187 164 88%

Patents by private sector funded

researchers 2775 1347 49%

Starting with patents: From the full population of human gene patents (US patents

identified using bioinformatics methods that disclose and claim a human gene

sequence or fragment (Jensen and Murray 2005), we examine which patents are also

disclosed in publications (Huang and Murray 2008 ).


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Scientists prefer disclosure over secrecythey are willing to trade off

salary in return for opportunities to control & disclose their work

Note: Survey respondents are AAAS members and free registrants on the Science magazine

Web site. Kelly Scientific Resources also participated in the survey by polling some 12,000

of their employees, whose responses were combined with the rest of the survey data.

Source: http://sciencecareers.sciencemag.org/

Scientist Preferences
http://www.kellyscientific.com/http://www.kellyscientific.com/


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Preferences not simply related to greater control over research

agenda provided in academic vs. industry (Aghion, Dewatrapoint

& Stein, 2007) but also opportunity to publish.

Estimates from a study of multiple job offers for PhD scientists(Stern, 2006) imply that individuals will accept 20% less, on

average, if they are given the opportunity to and incentives to

publish in the public scientific literature.

Disclosure in the form of patents does not provide a similar

preference effect for researchers

Scientist Preferences


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Disclosure Paths

Can choose the degree of disclosure through publication:

In order to obtain a patent, a minimum level of disclosure isrequired:

Baseline Assumption 1: publication and patent informationare distinct (from a commercial perspective)

Baseline Assumption 2: A patent increases the costs of a

work-around by the entrant (l)

[0, ]d D

P A Td


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Preferences

Scientist

Firm/Private Funder Monopoly profit:Pw

Competitive profit: pw

Entrants expected profit:

where qis distributed uniformly on [0,1] p+ bED < 1 (entry always uncertain)

Expected profit:

wagekudos

SU w b d

( ) E P A T

i b d id p l q

capital costprobability of entry

( ( )) ( ) E P A T

k w i b d id p l pP P


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Disclosure Regimes

Publication disclosure (d)

0 D

Patent

(i)

1Commercial

SciencePatent-Paper

Pairs

0 Secrecy Open Science


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Negotiations

Scientist and firm negotiations over disclosure regime:

, ,max ( ( ))( )w i d S E P A T w b d k w i b d id p l p P P

Unconstrained wage: w > 0

Relative commercial return high

Choose (i, d) to maximise joint

surplus

So long as

( )*

( )

E P AT

S E

k i b d

b bd d

p l p

p

P P

P

* 1

2max 0, ( ( ))( )

E P A T Sw k i b d id b d p l p P P

Constrained wage: w = 0

Relative commercial return low

Use dto transfer utility between

firm and scientist (d> d)

Choose (i, d) to maximise NTUNash objective

( )( )*

2 ( )

E P A T

E

k i b id

i bd

p l p

p

P P

P


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Surplus Maximisation

Consider the choices that maximise surplus

Disclosure choose no disclosure if

Patent choose no patent if

( )1S

E

b

d b pP

( )( )

( )1

E P AT k b d

i k

E P A T b d

p l p

p p

l

P P

P P

( ( ))( )S E P A T

b d k i b d id p l p P P


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Equilibrium Outcomes

When d> 1, surplus

maximisation would

involveD > d

Wages always zero whenthere is publication

Thus, level of disclosure

is less than full disclosure

Decisions do not interact.

i

d

1

1

Secrecy

Commercial

Science

Patent-Paper

Pairs

Open

Science


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Stronger IP Protection

Increasing l

More likely to take out a patent

If there is publication, negotiate more disclosure

Increasing dPAT Less likely to take out a patent

If there is a publication, reduces disclosure

( )( )*

2 ( )

E P A T

E

k i b id

i bd

p l p

p

P P

P

Stronger IP protection (higherland lower dPAT) stimulates

openness in science


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Overlapping Disclosures

Suppose that there was full overlap between patent and

publication disclosures.

No cost to same disclosures as in patent, so Commercial

Science does not arise.

If choose to publish and patent disclosure requirements are

low, then worthwhile patenting even if it would otherwise

encourage entry; so no Open Science

min 1 ,1 Secrecy,

otherwise Patent-Pape r Pairs

E P AT d b d

l


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IP Protection Through Disclosures

Baseline model: IP protection increases entry costs

Suppose workaround not guaranteed to work

Entrant sinks costs, l, and generates probability, 1r, that

will still be excluded. Expected entrant profit:

Expected firm profit:

Marginal cost of publication falls when you have a patent

(1 ) E E P A T

i i b d ib d r p l q

(1 ) (1 ) E E P A T k w i i i b d b id r r p l p P P

(1 ) ( )E

i br p P


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Complementarity

1

1

Secrecy

Commercial

Science

Patent-Paper

Pairs

Open

Science

d

(1 )((1 )

( )

E P AT k b d

i k

r r p l

p p

P

P P

i


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The Anti-Commons Effect

Fear that patent thickets will deter scientific research

Murray and Stern (2006) found that papers with patents

attached attracted fewer citations

Assume that patent protection alters scientific kudos:

where c (< 1) parameterises the anti-commons effect.

Only impacts on disclosures under Patent-Paper Pairs

(1 )S

b ic d


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Substitutability

1

1

Secrecy

Commercial

Science

Patent-Paper

Pairs

Open

Science

d

i


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Public Funding

Suppose there existed a liquidity constrained public funder

who cared about immediate use and cumulative knowledge

When will public funds encourage disclosure and increase

the degree of innovation?

Should publicly funded projects be permitted to obtain IP

protection (e.g., the Bayh-Dole Act)?

Do the answers to these questions hinge on the project-specific information available to the public funder?


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Model Amendments Introduce heterogeneity amongst projects:

Future benefit (internalised by kudos): bEdistributed uniformly on

[0,1]

Immediate use: let v be the immediate social value of a project;

distributed uniformly on [0,1]

Let Kbe the total level of public funds with k< K< 1

Impact of competition:

P = mv, p=bv (1 > m> 2 b)

Monopoly creates deadweight loss ofd>b

Simplifying assumption: dPAT= 0 (patenting always profitable).


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No public funding

bS

vv

( )( )v v v k m b l m b

Projects with positive

commercial return are

funded; i.e., v > v as

defined by:

( )S E

b b vm b

Patent-Paper

Pairs (d> 0)

Commercial

Science

(d= 0)

No funding

Funded projects with high

enough scientific kudos

permit publication; i.e.,

where:

0


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Public subsidy

bS

vv

A public subsidy to

private firms may

increase the number of

funded projects but

there is a large degree

of crowding out.

However, it does

increase disclosure.

Need to select on the

basis of project type.

Patent-Paper

Pairs (d> 0)

Commercial

Science

(d= 0)

No funding

0


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Pre-Bayh-Dole (high K)

bS

vv

Restricted public

funding:

(i) no commercial

returns to scientist; and

(ii) full disclosure

Select on basis of

scientific merit (bS)

Relatively high K

Opt out to secure

commercial returns

Private

funding (PPP)

(d=D)

Private

funding (CS)

(d= 0)No funding

0

Public funding

(OS)

(d= 0)

v


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Pre-Bayh-Dole (low K)

bS

vv

Restricted public

funding:

(i) no commercial



Select on basis of


Relatively low K

Private

funding (PPP)

(d=D)

Private

funding (CS)

(d= 0)No funding

0

v

Public funding

(OS)

(d= 0)

(d


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Post-Bayh-Dole (high K)

bS

vv

Unrestricted public

funding:

(i) allow commercial



Select on basis of


Relatively high KPrivate

funding (CS)

(d= 0)

No funding

0

v

Public funding (PPP)

(d=D)


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Post-Bayh-Dole (low K)

bS

vv

Unrestricted public

funding:

(i) allow commercial



Select on basis of


Relatively low K

Private

funding (CS)(d= 0)

No funding

0

v

Public funding (PPP)

(d=D)

Private

funding (PPP)

(d


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Conclusions Restrictions on public funding

Limit crowding out

Increase disclosure choices of some high v projects (but only when

there is high public funds available)

Therefore, removing restrictions will not stimulate more privatefunding

Matching grants would help but not remove these forces

What if the public funder could not (easily) observe disclosure?

Insist on a minimal level of disclosure only Creates a bigger incentive to obtain public funding

But less disclosure from that funding


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Mixed Options

bS

vv

Suppose funder cares

but cannot observe v

Offer a menu of

options with full

funding for restricted

grants and matched

funding for unrestricted

ones.

Select on basis of


Private

funding (CS)

(d= 0)

No funding

0

v

Public

funding

(OS)

(d=D)

Matched

funding

(PPP)(d=D)


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Complete observability

bS

vv

Suppose funder cares

but can observe v

Select on basis of

scientific merit (bS) and

immediate prospects.

Assume: no liquidity

constraints on public

funder Private

funding (CS)

(d= 0)No funding

0

v

Public

funding

(OS)

(d=D)

Private

funding

(PPP)

(d=D)

Public funding

(PPP)(d=D)


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Races for Priority

Another explanation for why commercial firms may want

disclosure: increase the speed of research by scientists

Suppose that scientiststo research more intensively (i.e.,

in a focused manner)must sacrifice other academicactivities

When will a firm sponsor several research teams with

disclosure rather than incur delay?


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Single Research Team Two periods: 1 and 2

Delay reduces total surplus:

Cannot contract on research intensity so to speed up scientist firm must

allow a minimum level of disclosure:

Firm will choose disclosure to prevent delay if:

It may be that disclosure is negotiated with d< 1

Private value of alt

activities if done today

(1 ) m ax ( )( )d S E

b d b d zd p l p P P

(1 )S

zd D

bd

2

(1 ) ( )( )

z

d zd p l p d P P


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Competing Teams Suppose that there is a single sponsorof two competing teams

If other team is slow, then fast research requires:

If other team is fast, then fast research requires:

Therefore, choose equilibrium where only one team goes fast. Thus,

disclosure will be optimal if:

Less disclosure required than single team case and hence, more likely to

commit to disclosure.

1

2

2(1 )

S S

S

zb d z b d d

bd

d

1

2

2S

S

zb d z d

b

12

(1 )(1 / 2 ) ( )( )

z

d zd d p l p d P P


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Competing Teams

Suppose there were two independent teams and firms who

compete for priority in kudos and for a patent

Three possible outcomes:

No publication (for dvery low)

One team commits to publication (for medium d)

Both teams commit to publication (for large d)

Thus, more competition implies more disclosure


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Future Directions

Dynamics

Publications: only receive kudos if cited

Patents: can earn future license fees

These decisions can interact

Competition for status

Role of scientific elites

Documents

What Drives Scientific Disclosure