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Patents and the choice of research projects

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  • Teshima, Narumi

Abstract

This paper examines how patent strength affects R&D competition in a model where two symmetric firms simultaneously choose their research projects. A stronger patent system induces not only greater R&D investment but also more research duplication. It is shown that there exists a range of patent strength in which increasing patent strength discourages innovation. Moreover, as firms behave more collusively in the post-innovation market, the strongest patent system becomes less likely to maximize the probability of innovation.

Suggested Citation

  • Teshima, Narumi, 2026. "Patents and the choice of research projects," International Journal of Industrial Organization, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:indorg:v:104:y:2026:i:c:s0167718725000931
    DOI: 10.1016/j.ijindorg.2025.103227
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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