Patent Acquisitions under Uncertainty: The Case of Requests for Examination
AbstractUnder the Japanese patent system, an applicant has to request examination within a given period of time after application. This paper studies the timing of a request for examination when return on patent is uncertain. When a firm files a patent application, it acquires a timing option limited for a fixed period and can exercise it at anytime. After modeling a real options model of the request for examination, we estimate it based on micro patent application data. The paper finds that the request for examination is deferred when uncertainty increases. We also find that the probability of requesting examination rises as the time limit approaches since the option value declines with time and falls down to zero at the time limit.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 07-06.
Length: 39 pages
Date of creation: Feb 2007
Date of revision:
patent; request for examination; real options; and duration analysis;
Find related papers by JEL classification:
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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