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Fragmented property rights and R&D competition

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  • Clark, Derek J.
  • Konrad, Kai A.

Abstract

Where product innovation requires several complementary patents, fragmented property rights can be a factor that limits firms’ willingness to invest in the development and commercialization of new products. This paper studies multiple simultaneous R&D contests for complementary patents and how they interact with patent portfolios that firms may have acquired already. We also consider how this interaction and the intensity of the contests depends on the type of patent trade regimes and the product market equilibria that result from these regimes. We solve for the contest equilibria and show that the multiple patent product involves an important hold-up problem that considerably reduces the overall contest effort.

Suggested Citation

  • Clark, Derek J. & Konrad, Kai A., 2006. "Fragmented property rights and R&D competition," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 123, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  • Handle: RePEc:trf:wpaper:123
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    File URL: https://epub.ub.uni-muenchen.de/13428/1/123.pdf
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    References listed on IDEAS

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    Cited by:

    1. Derek J. Clark & Kai A. Konrad, 2008. "Fragmented Property Rights and Incentives for R& D," Management Science, INFORMS, vol. 54(5), pages 969-981, May.

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    More about this item

    Keywords

    fragmented property rights; patents; contests; hold-up; R&D; patent pools; licensing;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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