OptimalPatent Policy with Recurrent Innovators
AbstractWe study an optimal patent problem in the spirit of Hopenhayn, et al (2006), but where all innovations arise from two repeated innovators. Following Hopenhayn, et al (2006) we divide patent regimes into those that are exclusive, in the sense that only one firm ever has a claim on the current market, and non-exclusive regimes where both firms simultaneously have ongoing claims to market leadership at a given instant. We show that in the exclusive regime, the long run treatment of the firms depends crucially on the investment technology: when it has no fixed costs, no firm is ever excluded, but with fixed costs one firm is excluded in finite time. We characterize non-exclusive regimes numerically and show that they may or may not lead to monopolization in the long run.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 1313.
Date of creation: 2010
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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- Christian Riis & Xianwen Shi, 2012. "Sequential Innovation and Optimal Patent Design," Working Papers tecipa-447, University of Toronto, Department of Economics.
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