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Strategic behaviour of firms in a duopoly and the impact of extending the patenting period

Author

Listed:
  • Tapan Biswas
  • Jolian McHardy

    (Department of Economics, The University of Sheffield)

Abstract

This paper deals with strategic behaviour of firms in a duopoly, subsequent to the claim by one firm that it has reduced the unit cost of production. A variety of possible strategic equilibria are discussed in the context of a duopoly game between a multinational and a local firm. In the context of an extended uniform period of patenting, as finally agreed in the Uruguay round (1994), firms have increased incentive to take patents. In the presence of cost differences, the act of taking process-patents has implications for the equilibrium output strategies of the duopoly firms and sometimes may have a negative overall welfare effect for the local producer and consumers.

Suggested Citation

  • Tapan Biswas & Jolian McHardy, 2010. "Strategic behaviour of firms in a duopoly and the impact of extending the patenting period," Working Papers 2010014, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2010014
    as

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    File URL: http://www.shef.ac.uk/content/1/c6/11/08/81/SERPS2010014.pdf
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    References listed on IDEAS

    as
    1. Esther Gal-Or, 1988. "The Advantages of Imprecise Information," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 266-275, Summer.
    2. Jean-Pierre Ponssard, 1979. "The Strategic Role of Information on the Demand Function in an Oligopolistic Market," Management Science, INFORMS, vol. 25(3), pages 243-250, March.
    3. Jean-Pierre Ponssard, 1976. "On the Concept of the Value of Information in Competitive Situations," Management Science, INFORMS, vol. 22(7), pages 739-747, March.
    4. Jean-Pierre Ponssard, 1979. "Uncertainty in the demand function, Oligopolistic markets and the strategic role of information," Post-Print hal-00364248, HAL.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Asymmetric information; duopoly; process patenting; repeated games;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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