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Knowledge diffusion under patent with asymmetric firms

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  • Arijit Mukherjee

    ()
    (University of Nottingham, UK)

  • Uday Bhanu Sinha

    ()
    (Delhi School of Economics, India)

Abstract

We show that if patent protection and trade secrecy generate asymmetric market structure, an innovator may prefer patent protection than trade secrecy even if the diffusion probability is higher under the former but it increases market concentration by preventing some imitators. So, whether an innovator prefers patent protection or trade secrecy depends on the trade-off between the diffusion probability and market concentration.

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File URL: http://www.accessecon.com/pubs/EB/2007/Volume12/EB-07L50002A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 12 (2007)
Issue (Month): 9 ()
Pages: 1-6

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Handle: RePEc:ebl:ecbull:eb-07l50002

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  1. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
  2. David D. Friedman & William M. Landes & Richard A. Posner, 1991. "Some Economics of Trade Secret Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 61-72, Winter.
  3. Bessen, James, 2005. "Patents and the diffusion of technical information," Economics Letters, Elsevier, vol. 86(1), pages 121-128, January.
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