Suzuki, Keishun (2017): Patent Protection, Optimal Licensing, and Innovation with Endogenous Entry.
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Abstract
How does patent policy affect innovation when patent licensing is crucial for firms? To address this question, the present paper incorporates voluntary patent licensing between an innovator and followers, which has been discussed in the literature of industrial organization, into a dynamic general equilibrium model. Unlike in existing studies, both the licensing fee and the number of licensees are endogenously determined by the innovator’s maximization and the free-entry condition. Using this model, we show that strong patent protection does not enhance innovation, economic growth, and welfare. Furthermore, the extended analysis provides a policy implication that the effect of patent policy depends on how difficult further innovation is without patent licensing of the current leading technology.
Item Type: | MPRA Paper |
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Original Title: | Patent Protection, Optimal Licensing, and Innovation with Endogenous Entry |
Language: | English |
Keywords: | innovation, patent protection, optimal patent licensing, endogenous market structure. |
Subjects: | L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L24 - Contracting Out ; Joint Ventures ; Technology Licensing O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital |
Item ID: | 82712 |
Depositing User: | Keishun Suzuki |
Date Deposited: | 21 Nov 2017 06:41 |
Last Modified: | 30 Sep 2019 15:00 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/82712 |