The Propensity to Patent in Oligopolistic Markets

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Dokumentart: WorkingPaper
Date: 2009
Source: Tübinger Diskussionsbeiträge der Wirtschaftswissenschaftlichen Fakultät ; 323
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Patenterteilung
Other Keywords:
Patenting decision , Secrecy , Disclosure requirement , Patent breadth , Horizontal product differentiation , Circular city
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We analyze the strategic protection decision of an innovator between a patent and secrecy in a setting with horizontally differentiated products. By introducing the patenting decision into the well known circular city model, the impact of the disclosure requirement linked to a patent application as well as the problem of legally inventing around a patent can be taken into account. Asymmetry in the circular market leads to a consumer migration effect. We find that secrecy may be the innovator’s profit maximizing strategy whenever the mandatory disclosure of information enhances the market entry of competitors.

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