Munich Personal RePEc Archive

Patent Protection with Cooperative R&D Option

Che, Xiaogang and Yang, Yibai (2009): Patent Protection with Cooperative R&D Option.

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Abstract

We investigate R&D incentive under patent protection with cooperation option. Chowdhury [Economics Letters, 2005, 89(1), 120-126] claims that patent protection may decrease R&D incentive when the tournament effect (TE) is negative. However, We show that patent protection in the presence of R&D cooperation option always increases R&D incentive. In addition, to increase R&D incentive, this option strictly dominates imitation and may dominate royalty licensing under patent protection, introduced by Mukherjee [Economics Letters, 2006, 93(2), 196-201].

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