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The Effects Of a Patent System on Product Varieties in Hotelling's Competition

Author

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  • John F. R. Harter

    (Eastern Kentucky University)

Abstract

The effects of a patent system on the chosen strategies of duopolists in an Hotelling's line game are examined. It is found that even a patent which is not designed to reward inventors with monopoly power will increase the range of costs to R&D from which a monopoly will result. Wider patents will increase the range of costs which give rise to a patent race as the unique equilibrium.

Suggested Citation

  • John F. R. Harter, 2001. "The Effects Of a Patent System on Product Varieties in Hotelling's Competition," Journal of Economic Insight, Missouri Valley Economic Association, vol. 27(1), pages 41-50.
    • Handle: RePEc:mve:journl:v:27:y:2001:i:1:p:41-50
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    More about this item

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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