This research aims to provide a coherent framework for understanding the emergence and consequences of economic institutions and their impact on growth. How do institutions function and which ones will thrive? What social norms support these institutions? Does technology impact institutions, and how? This project will address these issues theoretically, historically, and in the laboratory. This study will particularly focus on two institutions: reputation and intellectual property.
Reputation serves a key role in enhancing trade and production. Reputation, in turn, depends upon information flows. Our current theoretical work shows that effective reputations require that there neither be too little information - nor too much. This theory will be elaborated and subject to scrutiny in the laboratory.
A second key to modern institutions' growth and innovation is intellectual property. This, too, is an institution deserving of scrutiny. Do patents lead to less trade secrecy? Does IP enhance innovation by increasing incentives, or does it make it difficult to build on existing ideas? This study will pursue both theoretical and empirical answers to these questions.
