Innovation and Market Design
Abstract
Market design plays an essential role in promoting innovation. I examine emission allowance auctions, airport slot auctions, spectrum auctions, and electricity markets, and demonstrate how the market design can encourage innovation. Improved pricing information is one source of innovation. Enhancing competition is another driver of innovation seen in all of the applications. Market design fosters innovation in other ways as well by addressing other potential market failures.Suggested Citation
Peter Cramton. "Innovation and Market Design" Innovation Policy and the Economy. Ed. Josh Lerner and Scott Stern. Chicago: National Bureau of Economic Research, 2008. 113-137.
Available at: http://works.bepress.com/cramton/14