Three essays on patent policy for the optimal R&D procurement under asymmetric information

One motivation for the design of a new patent system arises from the perception that R&D procurements by innovators under the current patent system may result in poor performance. Uniform patent life in general does not fit all types of innovators because innovators differ in their R&D productivities and in their R&D cost efficiencies. When the patent authority has imperfect information about the attributes of innovations, it eventually faces either an adverse selection problem or a moral hazard problem that asymmetric information causes. This dissertation tries to answer whether the current patent system can still be an effective incentive scheme of R&D procurements even under asymmetric information, and if not, to propose how to reform it.; Private information is a critical impediment to the implementation of efficient R&D investments in cumulative innovations. Cumulativeness adds complexity to the problem of patent design. The nature of sequential innovations and bilateral private information inherent in cumulative innovations call for a new paradigm beyond a general form of 1 principal-1 agent model. With appropriate contracting sequence, we can find a self-selecting mechanism for cumulative innovations. We introduce a paradigm termed a three-tier hierarchy where the upper stream party offers a take-it-or-leave-it contract to the downstream party sequentially (the patent authority to the first innovator and the first innovator to the second innovator).; First, chapter 2 looks into a model of asymmetric information about cumulative innovations, specifically research tools. Using a mechanism approach, we design a menu of patent lives for research tools in a three-tier hierarchy where no patent is granted for commercial products. We can show this policy successfully induces efficient commercialization.; Chapter 3 contrasts with chapter 2 in that cumulative innovations arise in the manifestations such as improvements of previous products or cost reduction for producing earlier products. Chapter 3 introduces a mixed patent system of uniform patent life with a menu of fees to induce socially optimal R&D procurements of developing these subsequent innovations. With resorting to a three-tier organization again, we propose a menu of fees with uniform patent life for two manifestations in cumulative innovations.; Chapter 4 examines a model of moral hazard, together with multi-dimensional asymmetric information. (Abstract shortened by UMI.)...