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Patent protection for complex technologies

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  • Denicolò, Vincenzo
  • Zanchettin, Piercarlo

Abstract

We analyze patent protection with sequential and complementary innovation. We argue that in these cases the classic Nordhaus trade-off between innovation and static monopoly distortions is different from the case of isolated innovations. We parametrize the degree of innovation sequentiality and complementarity and show that the optimal level of patent protection increases with both. We also address the issue of the optimal division of profit among different innovators.

Suggested Citation

  • Denicolò, Vincenzo & Zanchettin, Piercarlo, 2022. "Patent protection for complex technologies," International Journal of Industrial Organization, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:indorg:v:81:y:2022:i:c:s016771872100103x
    DOI: 10.1016/j.ijindorg.2021.102811
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    References listed on IDEAS

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    1. Wipusanawan, Chayanin, 2023. "Standard-essential patents, innovation, and competition," Other publications TiSEM 292e319a-9e6a-4465-8f8f-7, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    Sequential innovation; Complementarity; Patent design; Elasticity of the supply of inventions; Division of profit;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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