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The Crowding-Out Effects of Long Duration of Patents

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Author Info
Chien-fu Chou
Oz Shy

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Abstract

In this article we demonstrate how a long duration of patents affects investment in new product development. We construct an overlapping-generations model of saving, investment, and product innovation and show that a long duration of patents results in a high aggregate value of monopoly firms that compete for the younger generation's savings with investment in new product development. We analyze the crowding-out effects of long duration of patents and their implications for individual's welfare under different patent regimes.

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File URL: http://links.jstor.org/sici?sici=0741-6261%28199322%2924%3A2%3C304%3ATCEOLD%3E2.0.CO%3B2-B&origin=repec
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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 24 (1993)
Issue (Month): 2 (Summer)
Pages: 304-312
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Handle: RePEc:rje:randje:v:24:y:1993:i:summer:p:304-312

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  1. Gerlagh , Reyer & Kverndokk, Snorre & Rosendahl, Knut Einar, 2008. "Linking Environmental and Innovation Policy," Memorandum 10/2008, Oslo University, Department of Economics. [Downloadable!]
    Other versions:
  2. Chu, Angus C., 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," MPRA Paper 17342, University Library of Munich, Germany. [Downloadable!]
  3. Alcalá, Francisco & Gonzalez-Maestre, Miguel, 2009. "Artistic Creation and Intellectual Property," Annals of Computational Economics 4614, Murcia University, DIGITUM. Universidad de Murcia. [Downloadable!]
    Other versions:
  4. Chu, Angus C., 2009. "Effects of Patent Length on R&D: A Quantitative DGE Analysis," MPRA Paper 16918, University Library of Munich, Germany. [Downloadable!]
  5. Reyer Gerlagh & Snorre Kverndokk & Knut Rosendahl, 2009. "Optimal Timing of Climate Change Policy: Interaction Between Carbon Taxes and Innovation Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(3), pages 369-390, July. [Downloadable!] (restricted)
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