Lecture
This lecture by the instructor covers the concept of market failures in innovation, focusing on four main types: positive spillovers, unhedged uncertainty, high fixed costs with low marginal costs, and coordination failures. It discusses how these failures impact the innovation process, leading to gaps between private and social returns, difficulties in financing innovation, inefficient pricing, and challenges in coordinating complementary assets. The lecture also explores the role of large firms versus small firms in addressing market failures and the importance of policies to mitigate these issues.