Demand Shocks, Procurement Policies, and the Nature of Medical Innovation: Evidence from Wartime Prosthetic Device Patents

Abstract We show that the demand shocks associated with the U.S. Civil War and World War I led to substantial increases in prosthetic device patenting (relative to patenting in other medical and mechanical technology classes). Through analyses of patent texts, we find that the Civil War led inventors to focus on production process improvements, while World War I did not. Further, we find that inventors emphasized dimensions of product quality that aligned with differences in buyers' preferences across wars. Alongside evidence from the historical record, these findings imply that procurement environments can significantly shape the scientific problems with which inventors engage.