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Are Intellectual Property Rights Unfair?

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  • Saint-Paul, Gilles

Abstract

If redistribution is distortionary, and if the income of skilled workers is due to knowledge-intensive activities and depends positively on intellectual property, a social planner which cares about income distribution may in principle want to use a reduction in Intellectual Property Rights (IPRs) rather than redistributive transfers. On the one hand, such a reduction reduces statis inefficiency. On the other hand, standard redistribution also reduces the level of R&D because it distorts occupational choice. We study this possibility in the context of a model with horizontal innovation, where the government, in addition to taxes and transfers, controls the fraction of innovations that are granted patents. The model predicts that standard redistribution always dominates limitations to IPRs.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3693.

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Date of creation: Jan 2003
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Handle: RePEc:cpr:ceprdp:3693

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Keywords: human capital; income distribution; inequality; innovation; intellectual property rights; redistribution; welfare state;

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  1. Foellmi, Reto & Josef Zweim¸ller, 2002. "Heterogeneous Mark-ups, Demand Composition, and the Inequality-Growth Relation," Royal Economic Society Annual Conference 2002 76, Royal Economic Society.
  2. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  3. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  4. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  5. Gilles Saint-Paul, 2001. "Distribution and Growth in an Economy with Limited Needs," CESifo Working Paper Series 423, CESifo Group Munich.
  6. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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Cited by:
  1. Naghavi, Alireza & Strozzi, Chiara, 2011. "Intellectual Property Rights, Migration, and Diaspora," IZA Discussion Papers 5864, Institute for the Study of Labor (IZA).
  2. Sano, Koichiro & Tomoda, Yasunobu, 2010. "Optimal public education policy in a two sector model," Economic Modelling, Elsevier, vol. 27(5), pages 991-995, September.

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