16.6 Intellectual Property
Inventions, music, art, literature, and even textbooks make our lives better. The rate of innovation has been much more rapid in the past two centuries than at any other time in human history. One major reason for the increased rate of invention is that society developed mechanisms to assign property rights to knowledge, making it intellectual property. Without property rights, potential innovators have weaker incentives to innovate due to the public good nature of knowledge.
For example, when a chip manufacturer develops a new microchip, one particular chip is rival and exclusive. However, without intellectual property ...
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