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Patents Hinder Collusion

Author

Listed:
  • Klaus Kultti

    (University of Helsinki)

  • Tuomas Takalo

    (University of Toulouse & Bank of Finland)

  • Juuso Toikka

    (Helsinki School of Economics)

Abstract

We argue that a patent system makes collusion among innovators more difficult. Our simple argument is based on two properties of the patent system. First, a patent not only protects against infringement but also against retaliation by former collusion members. Second, a deviator has an equal chance with former collusion members to get a patent on new innovations. We show that if a patent system reduces spillovers, it renders collusion impossible. Moreover, it is possible to design a patent system that simultaneously increases knowledge spillovers and eliminates collusion

Suggested Citation

  • Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2005. "Patents Hinder Collusion," Industrial Organization 0503015, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpio:0503015
    Note: Type of Document - pdf; pages: 27
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/io/papers/0503/0503015.pdf
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    References listed on IDEAS

    as
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    11. repec:rus:hseeco:72148 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Karbowski, Adam & Prokop, Jacek, 2018. "Kartele i patenty a nakłady badawczo-rozwojowe przedsiębiorstw [Cartels and patents, and R&D expenditures of companies]," MPRA Paper 90181, University Library of Munich, Germany, revised 2018.
    2. Adam Karbowski, 2020. "A Note on Patents and Leniency," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 97-108.
    3. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2006. "Simultaneous Model of Innovation, Secrecy, and Patent Policy," American Economic Review, American Economic Association, vol. 96(2), pages 82-86, May.

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    More about this item

    Keywords

    Patens; Collusion; Secrecy; Innovation;
    All these keywords.

    JEL classification:

    • L - Industrial Organization

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