Are patents strategic barriers to entry?
Patent protection restricts entry rather than preventing it. In case of a process innovation, it forces a potential entrant to suﬃciently diﬀerentiate his production technology. We investigate whether a patentholder threatened by entry can strategically renew her patent. For low demand, the patent renewal is suﬃcient to deter entry, whereas a high demand attracts competitor, even if there is a patent. On the other hand, the renewal decision can signal information to an uninformed entrant whenever the patentholder is informed. This may act as a barrier to entry. Thus, a patent is renewed more frequently in presence of asymmetric information.
(This abstract was borrowed from another version of this item.)
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bester, H. & Petrakis, E., 1991.
"The Incentives for Cost Reduction in a Differentiated Industry,"
1991-36, Tilburg University, Center for Economic Research.
- Bester, Helmut & Petrakis, Emmanuel, 1993. "The incentives for cost reduction in a differentiated industry," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 519-534.
- Bester, H. & Petrakis, E., 1991. "The Incentives for Cost Reduction in a Differentiated Industry," Papers 9136, Tilburg - Center for Economic Research.
- Milgrom, Paul & Roberts, John, 1982.
"Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis,"
Econometric Society, vol. 50(2), pages 443-59, March.
- Paul Milgrom & John Roberts, 1998. "Limit Pricing and Entry Under Incomplete Information: An Equilibrium Analysis," Levine's Working Paper Archive 245, David K. Levine.
- Henry Grabowski, 2002. "Patents, Innovation and Access to New Pharmaceuticals," Journal of International Economic Law, Oxford University Press, vol. 5(4), pages 849-860, December.
- Klemperer, Paul, 1990.
"How Broad Should the Scope of Patent Protection Be?,"
CEPR Discussion Papers
392, C.E.P.R. Discussion Papers.
- Paul Klemperer, 1990. "How Broad Should the Scope of Patent Protection Be?," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 113-130, Spring.
- Grabowski, Henry, 2002. "Patents, Innovation and Access to New Pharmaceuticals," Working Papers 02-28, Duke University, Department of Economics.
- Claude CRAMPES & Corinne LANGINIER, 1998.
"Information Disclosure in the REnewal of Patent,"
Annales d'Economie et de Statistique,
ENSAE, issue 49-50, pages 265-288.
- Crampes, Claude & Langinier, Corinne, 2000. "Information Disclosure in the Renewal of Patents," Staff General Research Papers 10461, Iowa State University, Department of Economics.
- Crampes, C. & Langinier, C., 1996. "Information Disclosure in the Renewal of Patents," Papers 96.429, Toulouse - GREMAQ.
- van Dijk, Theon, 1996. "Patent Height and Competition in Product Improvements," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 151-67, June.
- In-Koo Cho & David M. Kreps, 1997.
"Signaling Games and Stable Equilibria,"
Levine's Working Paper Archive
896, David K. Levine.
- Suzanne Scotchmer & Jerry Green, 1990. "Novelty and Disclosure in Patent Law," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 131-146, Spring.
- Gilbert, R. & Shapiro, C., 1988.
"Optimal Patent Length And Breadth,"
28, Princeton, Woodrow Wilson School - Discussion Paper.
- Henry Grabowski, 2003. "Patents, Innovation and Access to New Pharmaceuticals," Levine's Working Paper Archive 618897000000000656, David K. Levine.
- Kortum, Samuel & Lerner, Josh, 1999. "What is behind the recent surge in patenting?1," Research Policy, Elsevier, vol. 28(1), pages 1-22, January.
- Horstmann, Ignatius & MacDonald, Glenn M & Slivinski, Alan, 1985. "Patents as Information Transfer Mechanisms: To Patent or (Maybe) Not to Patent," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 837-58, October.
- Mukesh Eswaran & Nancy Gallini, 1996. "Patent Policy and the Direction of Technological Change," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 722-746, Winter.
When requesting a correction, please mention this item's handle: RePEc:eee:jebusi:v:56:y:2004:i:5:p:349-361. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.