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Patent pool under endogenous technology choice

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  • Arijit Mukherjee

    (School of Business and Economics, Loughborough University, UK)

Abstract

It is generally believed that patent pools by complementary input suppliers make the consumers, final goods producers and the society better off by reducing the complements problem. We show that this may not be the case under endogenous technology choice. Although a patent pool reduces input price, it may make the consumers and the society worse off by reducing innovation. We also show that a patent pool makes the input suppliers better off, but it may not make all final goods producers better off compared with non-cooperation between the input suppliers.

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File URL: http://www.lboro.ac.uk/departments/sbe/RePEc/lbo/lbowps/Mukherjee_lbowps_2013_07.pdf
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Bibliographic Info

Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2013_07.

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Date of creation: Jul 2013
Date of revision: Jul 2013
Handle: RePEc:lbo:lbowps:2013_07

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Keywords: Complementary inputs; Patent pool; Innovation; Welfare;

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References

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  1. Sung-Hwan Kim, 2004. "Vertical Structure and Patent Pools," Review of Industrial Organization, Springer, Springer, vol. 25(3), pages 231-250, 07.
  2. Jay Pil Choi, 2009. "Patent Pools and Cross-Licensing in the Shadow of Patent Litigation," Global COE Hi-Stat Discussion Paper Series, Institute of Economic Research, Hitotsubashi University gd08-044, Institute of Economic Research, Hitotsubashi University.
  3. Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(2), pages 131-154, Spring.
  4. Priest, George L, 1977. "Cartels and Patent License Arrangements," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 20(2), pages 309-77, October.
  5. Layne-Farrar, Anne & Lerner, Josh, 2011. "To join or not to join: Examining patent pool participation and rent sharing rules," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 29(2), pages 294-303, March.
  6. Schmidt, Klaus M., 2008. "Complementary Patents and Market Structure," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 249, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  7. Lerner, Josh & Tirole, Jean, 2003. "Efficient Patent Pools," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 211, Institut d'Économie Industrielle (IDEI), Toulouse.
  8. Reiko Aoki & Sadao Nagaoka, 2004. "The Consortium Standard and Patent Pools," Hi-Stat Discussion Paper Series, Institute of Economic Research, Hitotsubashi University d04-32, Institute of Economic Research, Hitotsubashi University.
  9. Mukherjee, A. & Pennings, E., 2000. "Imitation, patent protection and welfare," Eindhoven Center for Innovation Studies (ECIS) working paper series, Eindhoven Center for Innovation Studies (ECIS) 00.03, Eindhoven Center for Innovation Studies (ECIS).
  10. Kato, Atsushi, 2004. "Patent pool enhances market competition," International Review of Law and Economics, Elsevier, Elsevier, vol. 24(2), pages 255-268, June.
  11. Mattoo, Aaditya & Olarreaga, Marcelo & Saggi, Kamal, 2001. "Mode of Foreign Entry, Technology Transfer, and FDI Policy," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2870, C.E.P.R. Discussion Papers.
  12. Mukherjee, Arijit, 2003. "Does society prefer small innovation?," Economics Letters, Elsevier, Elsevier, vol. 78(3), pages 301-307, March.
  13. Ray Chaudhuri, Prabal, 1995. "Technological asymmetry and joint product development," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(1), pages 23-39, March.
  14. Mookherjee, Dilip & Ray, Debraj, 1991. "On the competitive pressure created by the diffusion of innovations," Journal of Economic Theory, Elsevier, Elsevier, vol. 54(1), pages 124-147, June.
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