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Regional exhaustion of intellectual property
Author(s) -
Saggi Kamal
Publication year - 2014
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/ijet.12031
Subject(s) - rest (music) , economics , intellectual property , set (abstract data type) , property (philosophy) , political science , law , medicine , cardiology , philosophy , epistemology , computer science , programming language
This paper analyzes the causes and consequences of regional exhaustion of intellectual property, a discriminatory policy under which a set of countries permit parallel imports from one another but not from the rest of the world. A three‐country model is developed in which two high‐income countries jointly choose their common exhaustion policy among national (NE), international (IE), or regional exhaustion (RE). The two high‐income countries implement RE when they are similar to each other and sufficiently high‐income relative to the third country. Restricting their choice set to only non‐discriminatory exhaustion policies (i.e., NE and IE) makes all countries worse off.