Research Diversity and Invention

Abstract

This paper explains that when there is great uncertainty about which elements of knowledge must be combined to make an invention, the likelihood of invention increases markedly—by many orders of magnitude—when there are numerous diverse research organizations, rather than just a few. The paper examines the possibility that competition (antitrust) policy toward mergers would be improved if enforcement efforts placed more emphasis on protecting the diversity that is provided by numerous research rivals in a market.