Governing the innovation commons

Abstract

AbstractThis paper analyses the origin of innovation using institutional economic theory. Because of distributed information and fundamental uncertainty, an efficient institutional context for the economic organization of innovation in its early stages is often that of a common pool resource. The theory of theinnovation commonsdraws upon Hayek, Williamson and Ostrom to present the innovation problem as a combined knowledge problem, implicit contracting problem and collective action governance problem. Innovation commons theory also implies that Kirzner's model of entrepreneurial opportunity discovery extends to higher-order groups, suggesting a multilevel selection model of economic evolution.