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Sequential Product Innovation, Competition and Patent Policy

Listed author(s):
  • George Norman
  • Lynne Pepall
  • Dan Richards

This paper examines the role of patent policy in a spatial model of sequential innovation. Initial entrepreneurs develop a new product market and anticipate that subsequent innovation may lead to a product line that consumers value more highly. The likelihood of sequential innovation increases with the number of initial early entrants in the market. Patent protection that encourages early entry can therefore raise the probability of both initial and subsequent innovation. We determine the optimal patent breadth as a function of key industry characteristics of both consumer taste and the new technology.

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File URL: http://ase.tufts.edu/economics/documents/papers/2014/sequentialInnovation.pdf
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Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0786.

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Date of creation: 2014
Handle: RePEc:tuf:tuftec:0786
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  18. Javier Miranda & Shawn Klimek & Ron Jarmin, 2004. "Firm Entry and Exit in the U.S. Retail Sector, 1977-1997," Working Papers 04-17, Center for Economic Studies, U.S. Census Bureau.
  19. Ted O'Donoghue & Suzanne Scotchmer & Jacques-François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, 03.
  20. Michele Boldrin & Juan C Allamand & David K Levine & Carmine Ornaghi, 2011. "Competition and Innovation," Levine's Working Paper Archive 786969000000000232, David K. Levine.
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