Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-60863
Judd, Kenneth L; Schmedders, Karl; Yeltekin, Sevin (2012). Optimal rules for patent races. International Economic Review, 53(1):23-52.
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There are two important rules to patent races: minimal accomplishment necessary to receive the patent and the allocation of the innovation benefits. We study the optimal combination of these rules. A planner, who cannot distinguish between competing firms in a multistage innovation race, chooses the patent rules by maximizing either consumer or social surplus. We show that efficiency cost of prizes is a key consideration. Races are undesirable only when efficiency costs are low, firms are similar, and social surplus is maximized. Otherwise, the optimal policy involves a race of nontrivial duration to spur innovation and filter out inferior innovators.
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|Item Type:||Journal Article, refereed, original work|
|Communities & Collections:||03 Faculty of Economics > Department of Business Administration|
|Dewey Decimal Classification:||330 Economics|
|Deposited On:||10 Apr 2012 08:40|
|Last Modified:||03 Dec 2013 14:26|
|Free access at:||Publisher DOI. An embargo period may apply.|
|Other Identification Number:||merlin-id:6825|
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