IDEAS home Printed from https://ideas.repec.org/p/sgh/kaewps/2025112.html

Innovation and Competition with Imperfect Patent Protection

Author

Listed:
  • Marek Dietl
  • Łukasz Skrok
  • Bartłomiej Wiśnicki

Abstract

We employ a duopoly model with horizontal differentiation of a product to analyse impact of imperfect patent rights in the form of a patent thicket on market entry and outcomes in a market when a single unit of a good is to be provided, reflecting a competition of two potential suppliers within a tender procedure of a complex product. We show that even under price competition, a treat of litigation coming from the overlap in the patent protection leads to pricing decisions above marginal costs level. Such a situation, on the one hand, is socially costly due to costs linked to fixed costs of market entry of both competitors, but on the other hand, it is not necessarily the most beneficial from the point of view of a buyer. The paper resolves Bertrand paradox in a novel way.

Suggested Citation

  • Marek Dietl & Łukasz Skrok & Bartłomiej Wiśnicki, 2025. "Innovation and Competition with Imperfect Patent Protection," KAE Working Papers 2025-112, Warsaw School of Economics, Collegium of Economic Analysis.
    • Handle: RePEc:sgh:kaewps:2025112
    DOI: 10.33119/kaewps2025112
    as

    Download full text from publisher

    File URL: https://hdl.handle.net/20.500.12182/1380
    Download Restriction: no
    File URL: https://libkey.io/10.33119/kaewps2025112?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sgh:kaewps:2025112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dariusz Nojszewski (email available below). General contact details of provider: https://edirc.repec.org/data/kawawpl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.