Premium
D ynamic R&D C ompetition , R esearch L ine D iversity , and I ntellectual P roperty R ights
Author(s) -
Choi Jay Pil
Publication year - 1993
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1430-9134.1993.00277.x
Subject(s) - monopoly , intellectual property , incentive , competition (biology) , diversity (politics) , industrial organization , limiting , product (mathematics) , property rights , line (geometry) , business , simple (philosophy) , product line , law and economics , microeconomics , economics , political science , law , engineering , mathematics , ecology , mechanical engineering , philosophy , geometry , epistemology , biology , manufacturing engineering
This paper develops a simple model of sequential innovations with a diversity of research lines. Competitive strategies of firms for R&D are analyzed at each stage in a sequence of innovations. We compare two alternative regimes of enforcing patent law, as a mechanism to provide adequate incentives for R&D at each stage. The regime that protects the research line gives monopoly rights to an entire line of research, hence limiting the utilization of the previous knowledge and retarding subsequent innovations. The other regime protects the product, which facilitates the use of previous knowledge at the expense of providing inadequate protection to the ideas embodied in the product, and results in underinvestment in the first stage.