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The Patent Lottery: Exploiting Behavioral Economics For The Common Good, Dennis D. Crouch

Faculty Publications

Lotteries are immensely popular. Players are willing to give the organizer a large monetary cut of every ticket purchase in return for a chance at a jackpot. In some ways, our current patent system operates as a lottery as well. Most patents are relatively worthless, while a few are highly valuable. Reaching the major payout of a highly valuable patent takes perseverance in the face of tremendous uncertainty. Like lottery players, small entrepreneurial companies and individuals have shows signs of bounded rationality. In particular, what I call the patent lottery effect is associated with the phenomena of potential innovators overweighting …