We model how risk-neutral firms’ ability to obtain substantial private returns on marginal new technologies causes them to “reach for mediocrity” by investing in socially suboptimal projects, even in the presence of competition and new entrants. Focusing primarily on pharmaceutical innovation, we analyze various policy interventions to solve this underinvestment problem. In particular, we describe a new approach for a “value-based” patent system, which ties patent protection to an underlying invention's social value, and we show how such a system could incentivize socially optimal innovation.

中文翻译：

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追求平庸：制药创新中的竞争与停滞

我们对风险中立的公司如何利用边际新技术获得丰厚的私人回报的能力进行建模，即使在存在竞争和新进入者的情况下，它们也通过投资于社会上次优的项目来“达到中等水平”。我们主要关注药品创新，分析了各种政策干预措施来解决这一投资不足的问题。特别是，我们描述了一种“基于价值”的专利制度的新方法，该方法将专利保护与潜在发明的社会价值联系起来，并且我们展示了这种制度如何激励社会最优创新。