Patents, Research Exemption, and the Incentive for Sequential Innovation
Abstract"We develop a quality ladder model to study the R&D incentive impacts of intellectual property rights with a "research exemption" or "experimental use" provision. The innovation process is sequential and cumulative and takes place alongside production in an infinite-horizon setting. We solve the model under two distinct intellectual property regimes, characterize the properties of the relevant Markov perfect equilibria, and investigate the profit and welfare effects of the research exemption. We find that firms, ex ante , always prefer full patent protection. The welfare ranking of the two intellectual property regimes, on the other hand, depends on the relative magnitudes of the costs of initial innovation and improvements." Copyright (c) 2008, The Author(s) Journal Compilation (c) 2008 Blackwell Publishing.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.
Volume (Year): 17 (2008)
Issue (Month): 2 (06)
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Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/
Other versions of this item:
- Moschini, GianCarlo & Yerokhin, Oleg, 2008. "Patents, Research Exemption, and the Incentive for Sequential Innovation," Staff General Research Papers 12598, Iowa State University, Department of Economics.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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