Trade in Ideas: Performance and Behavioral Properties of Markets in Patents

“This is a book for the times. Never have we been more in need of the wealth creation process that can only come from innovations subjected to the trial and error process of selection to decide what among all the experiments can be supported for further trial.” --Vernon L. Smith, Nobel Laureate in Economics 2002, Chapman University “Eskil Ullberg … departs from the error made by Arrow, an ambitious leap, perhaps, but one that is in this case warranted. Eskil seeks to explain more of the mechanisms by which property rights, specifically IP, can be sold by inventors to diversify risk and to monetize value. Using the methodology of experimental economics, he creates a controlled game in which players – rewarded with money returns, to the extent that they follow rules, manage risk, and execute smart trades – reveal how economic agents might generally transact in IP rights traded in organized exchanges. In testing how such trading institutions work, this research seeks to bring Adam Smith’s trade theory up to the modern day work on market design by such scholars as Vernon Smith, David Porter, Steve Rassenti, and Charles Plott.” --Thomas W. Hazlett, George Mason University, USA and Director of the Information Economy Project