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Editor: Universidad Carlos III de Madrid. Departamento de Economía

Issued date: 2007-06

ISSN: 2340-5031

Serie-No.: UC3M Working papers. Economics07-38

Keywords: Anticommons , Sequential innovation , Patent pools , Optimal patent policy , Complementary monopoly , Cross-Licensing

JEL Classification: O31 , O34 , L41 , D4

Rights: Atribución-NoComercial-SinDerivadas 3.0 España

Abstract:When innovation is sequential, the development of new products depends on theaccess to previous discoveries. As a consequence the patent system affects both therevenues and the cost of the innovator. We construct a model of sequential innovationin which When innovation is sequential, the development of new products depends on theaccess to previous discoveries. As a consequence the patent system affects both therevenues and the cost of the innovator. We construct a model of sequential innovationin which an innovator uses n patented inputs in RandD to invent a new product. We askthree questions: (i) what is the net effect of patents on innovation as technologiesbecome more complex (n increases)? (ii) are patent pools welfare enhancing? (iii) whatis the optimal response of patent policy as technological complexity increases? We findthat the answers to these questions depend on the degree of complementarity andsubstitutability between the inputs used in research.+-





Author: Llanes, Gastón; Trento, Stefano

Source: http://e-archivo.uc3m.es


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Universidad Carlos III de Madrid Repositorio institucional e-Archivo http:--e-archivo.uc3m.es Departamento de Economía DE - Working Papers.
Economics.
WE 2007-06 Anticommons and optimal patent policy in a model of sequential innovation Llanes, Gastón http:--hdl.handle.net-10016-965 Descargado de e-Archivo, repositorio institucional de la Universidad Carlos III de Madrid Working Paper 07-68 Economic Series (38) June 2007 Departamento de Economía Universidad Carlos III de Madrid Calle Madrid, 126 28903 Getafe (Spain) Fax (34) 916249875 ANTICOMMONS AND OPTIMAL PATENT POLICY IN A MODEL OF SEQUENTIAL INNOVATION∗ GASTÓN LLANES† AND STEFANO TRENTO§ Abstract When innovation is sequential, the development of new products depends on the access to previous discoveries.
As a consequence the patent system affects both the revenues and the cost of the innovator.
We construct a model of sequential innovation in which an innovator uses n patented inputs in R and D to invent a new product.
We ask three questions: (i) what is the net effect of patents on innovation as technologies become more complex (n increases)? (ii) are patent pools welfare enhancing? (iii) what is the optimal response of patent policy as technological complexity increases? We find that the answers to these questions depend on the degree of complementarity and substitutability between the inputs used in research. Keywords: Anticommons, Sequential Innovation, Patent Pools, Optimal Patent Policy, Complementary Monopoly, Cross-Licensing. JEL Classification: O31, O34, L41, D4. We are grateful to our advisor Michele Boldrin.
We thank David Levine for useful comments and suggestions on an earlier draft.
We thank participants of seminars at Universidad Carlos III de Madrid and Washington University in St.
Louis.
All remaining errors are our responsibility.
We acknowledge support from the Ministry of Education of Spain (Gastón Llanes) and the Community of Madrid (StefanoTrento). † Departamento de Econo...





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