Incentives for inventors: Theory of market and planned economies

There have been few reviews of the comparative incentives for inventors in market and planned economies. This theoretical analysis suggests that market economies provide the stronger incentives regarding generally unanticipated invention, while planned economies are the better for anticipated inventions. To achieve a preferred mix between types of invention, the incentives for the anticipated type may need supplementing with patents. Other implications for public policy under both autarky and trade are also examined.