Basic innovations are often fundamental to the development of applications that may be developed by other innovators. In this setting, we investigate whether patent pools can rectify the lack of incentives for developers to invest in applications. Following Green and Scotchmer (1995), we also wonder whether broad basic patents are necessary to provide enough incentives for basic innovators. We show that patent pools are more likely to be formed with patents of very different breadth, or patents of similarly wide breadth. Further, even though patent pools rectify the problem of developers’ incentives, they may reduce the incentive for doing basic research.
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12647.
Length: Date of creation: 19 Jul 2006 Date of revision: Handle: RePEc:isu:genres:12647
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