Ligation and Settlement in Patent Infringement Case
We investigate how intensive should be the monitoring effort and how the reaction of the patentholder may influence the entry decision. In a simultaneous game we show that even if the penalty paid by the infringer and the settlement cost are high, the patentholder may decide to choose a settlement instead of a trial. Furthermore, the likelihood of entry increases with the penalty for certain values of the parmeters. If monitoring expenditures and centry are sequential, whatever the decision order entry occurs less often than in the simultaneous setting.
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|Date of creation:||2000|
|Date of revision:|
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