Dynamic competition and intellectual property rights in a model of product development

Billette De Villemeur, Etienne; Ruble, Richard; Versaevel, Bruno

Document type :

Article dans une revue scientifique: Article original

DOI :

10.1016/j.jedc.2018.11.009

Title :

Dynamic competition and intellectual property rights in a model of product development

Author(s) :

Billette De Villemeur, Etienne [Auteur]

Groupe de recherche en économie mathématique et quantitative [GREMAQ]
Lille économie management - UMR 9221 [LEM]
Ruble, Richard [Auteur]
EMLyon Business School [EM]
Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne [GATE Lyon Saint-Étienne]
Versaevel, Bruno [Auteur]
EMLyon Business School [EM]
Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne [GATE Lyon Saint-Étienne]

Journal title :

Journal of Economic Dynamics and Control

Pages :

270-296

Publisher :

Elsevier

Publication date :

2019-03

ISSN :

0165-1889

English keyword(s) :

Cost of imitation
Dynamic competition
Patent policy
Winner-take-all preemption

HAL domain(s) :

Sciences de l'Homme et Société/Economies et finances

English abstract : [en]

We study innovation timing and socially optimal intellectual property rights (IPRs) when firms facing market uncertainty invest strategically in product development. If demand growth and volatility are high, attrition ...
Show more >We study innovation timing and socially optimal intellectual property rights (IPRs) when firms facing market uncertainty invest strategically in product development. If demand growth and volatility are high, attrition occurs and IPRs should ensure the cost of imitation attains a lower bound we identify. If demand growth and volatility are low then provided that the private imitation incentive is socially excessive, IPRs should set the cost of imitation high enough to induce preemption, and possibly winner-take-all preemption. Moreover, the welfare achieved with optimal IPRs is then greater with endogenous innovation than if firm roles are predetermined, illustrating the importance of fostering dynamic competition. In extensions we show how firms benefit from open standards, takeovers have ambiguous welfare effects and simple licensing schemes are welfare improving.Show less >

Language :

Anglais

Peer reviewed article :

Oui

Audience :

Internationale

Popular science :

Non

Collections :

Lille Économie Management (LEM) - UMR 9221

Source :

Harvested from HAL

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