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Patent Races with Dynamic Complementarity

  • A. Blasco

Recent models of multi-stage R&D have shown that a system of weak intellectual property rights may lead to faster innovation by inducing firms to share intermediate technological knowledge. In this article I introduce a distinction between plain and sophisticated technological knowledge, which has not been noticed so far but plays a crucial role in determining how different appropriability rules affect the incentives to innovate. I argue that the positive effect of weak intellectual property regimes on the sharing of intermediate technological knowledge vanishes when technological knowledge is sophisticated, as is likely to be the case in many high tech industries.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp733.

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Date of creation: Feb 2011
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Handle: RePEc:bol:bodewp:wp733
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  1. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635.
  2. Bessen, James, 2005. "Patents and the diffusion of technical information," Economics Letters, Elsevier, vol. 86(1), pages 121-128, January.
  3. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
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