Optimal patent length and breadth in an economy with creative destruction and non-diversifiable risk |
| |
Authors: | Tapio Palokangas |
| |
Institution: | 1.HECER, University of Helsinki,Helsinki,Finland |
| |
Abstract: | In this paper, I examine the optimal patent shape in an economy in which R&D firms innovate and imitate, households face non-diversifiable
risk and there is externality in production and R&D. With non-diversifiable risk, a household’s consumption and investment
decisions are interlinked. This economy contains industries of two kinds: monopoly industries with an innovator only, and
duopoly industries with an innovator and an imitator. I define patent length as the expected time in which an innovation is imitated, and patent breadth as the innovator’s profit share in an industry after a successful imitation. The government can control patent length by
the requirements for accepting a substitute for a patented good, and patent breadth by imposing compulsory licensing and royalties
for the patentee after a successful imitation. I show that the stronger the externality in production relative to R&D is,
the slower the optimal growth rate, the larger the optimal proportion of duopoly industries, and the longer and narrower the
optimal patent. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|