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Journal of Undergraduate Research

Keywords

asymmetry, small firms, large firms, technology partnerships

College

Marriott School of Management

Department

Management

Abstract

Substantial friction exists in markets when sharing new innovation or realizing the gains that arise from innovation. This friction may create suboptimal outcomes for broader society because it can lead to situations in which the best innovations are not widely shared. For example, it is well-known that large, well-resourced technology firms often patent far beyond their target product markets in efforts to stave off competition from new or upstart entrants. Some of these incumbent firms also engage in alliances with innovative smaller firms with the explicit intent to suppress or exploit innovations emerging from the alliance. This has negative consequences for society because it means that the best ideas may not be brought to market in a timely way.

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