On the Social Desirability of Patents for Sequential Innovations in a Vertically Differentiated Market

Piero Tedeschi, Luca Lambertini

Research output: Contribution to journalArticlepeer-review

6 Citations (SciVal)

Abstract

We consider a market for vertically differentiated goods where firms enter over time, after having developed innovations characterised by different quality levels. We show that patent height and length interact to determine the ultimate emergence of duopoly. In general, imposing quality improvements on later entrants entails the persistence of monopoly, while a duopoly equilibrium emerges when the second innovator is allowed to produce a sufficiently inferior quality and the patent protection granted to the first innovator is not too long-lasting.
Original languageEnglish
Pages (from-to)193-214
Number of pages22
JournalJOURNAL OF ECONOMICS
Volume90
Publication statusPublished - 2007

Keywords

  • Industrial organization
  • differentiation
  • innovation

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