[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

What negative effects might this change have on the
rate of innovation? What positive effect might it have for
the economy?
2. Suppose that many years ago, one inventor received a
patent for orange juice, and then another came forward
and requested a patent for lemonade. The first inventor
maintained that the orange juice patent should be interpreted
to cover all fruit juices, while the second inventor
argued that the original patent included only one particular
method of making one kind of juice. What are the
trade-offs for society as it sets rules for deciding cases
such as these?
3. Although a patent ensures a monopoly on that particular
invention for some time, it also requires that the
inventor disclose the details of the invention. Under
what conditions might a company (like Coca-Cola)
prefer to use trade secrets rather than patents to
protect its formulas?
4. Why might a company invest in R & D even if it does not
believe it will be able to patent its discovery?
5. Learning by doing seems to be important in the semiconductor
industry, in which the United States and
Japan are the main producers. Explain why U.S. and
Japanese firms may race to try to bring out new generations
of semiconductors. If learning by doing is important
in the semiconductor industry, why might other
nations try to use an infant industry strategy to develop
their own semiconductor industry?
470 ∂ CHAPTER 20 TECHNOLOGICAL CHANGE