Date: 2014
Type: Working Paper
The length of patents and the timing of innovation
Working Paper, EUI MWP, 2014/24
ROUSAKIS, Michael, The length of patents and the timing of innovation, EUI MWP, 2014/24 - https://hdl.handle.net/1814/33611
Retrieved from Cadmus, EUI Research Repository
This article evaluates the effects of patent rights on the timing of innovation. As in Shleifer (1986), firms in different sectors receive cost-saving ideas exogenously and sequentially, from which they can make temporary monopoly profits. In the presence of sectoral demand externalities, firms might opt to postpone the implementation of their ideas so that they innovate together with firms from other sectors. I show that a prolongation of patent rights limits the appeal of this possibility, and, for ideas which are not too radical, it can lead to a welfare improvement.
Additional information:
This version supersedes earlier versions circulated between 2009 and 2013 and titled “Capitalizing Implementation Cycles” and “Implementation Cycles: Investment-Specific Technological Change and the Length of Patents.”
Cadmus permanent link: https://hdl.handle.net/1814/33611
ISSN: 1830-7728
Series/Number: EUI MWP; 2014/24
LC Subject Heading: Patent rights; Timing of innovation; Implementation cycles with capital; Temporary monopolies; Demand externalities; Multiple equilibria; D43; E32; O3