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Incentives for process innovations under discrete structural alternatives of competition policy

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  • A. Shastitko
  • A. Kurdin.

Abstract

This study analyzes the incentives for process innovations under different conditions determined by the competition policy for intellectual property rights (IPR) and particular features of markets and technologies. Competition policy is defined by the presence or absence of compulsory licensing, markets are characterized by technological leadership or technological competition. The results of modelling show that the uncertainty engendered by technological competition may lower the intensity of innovative activities, if there are no mechanisms of coordination between participants. Voluntary licensing generally improves social welfare but does not guarantee an increase in innovative efforts. Compulsory licensing can impede innovations due to the opportunistic behaviour of market participants but certain measures of state policy can prevent this negative effect.

Suggested Citation

  • A. Shastitko & A. Kurdin., 2016. "Incentives for process innovations under discrete structural alternatives of competition policy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
  • Handle: RePEc:nos:voprec:2016-04-3
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    References listed on IDEAS

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    1. David Encaoua & Abraham Hollander, 2002. "Competition Policy and Innovation," Oxford Review of Economic Policy, Oxford University Press, vol. 18(1), pages 63-79, Spring.
    2. Fan, Cuihong & Jun, Byoung Heon & Wolfstetter, Elmar G., 2013. "Licensing process innovations when losersʼ messages determine royalty rates," Games and Economic Behavior, Elsevier, vol. 82(C), pages 388-402.
    3. Daron Acemoglu & Ufuk Akcigit, 2012. "Intellectual Property Rights Policy, Competition And Innovation," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 1-42, February.
    4. Gallini, Nancy T, 1984. "Deterrence by Market Sharing: A Strategic Incentive for Licensing," American Economic Review, American Economic Association, vol. 74(5), pages 931-941, December.
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    More about this item

    Keywords

    competition policy; compulsory licensing; process innovations.;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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