The Distributive Implications Of Patents On Indivisible Goods

Dan Usher

No 1018, Working Paper from Economics Department, Queen's University

Abstract: Patents raise the price and reduce consumption of the patented good, but the resulting deadweight loss is thought to be worth bearing when patent protection is required as an incentive to invention. The newly-invented good generates a residual surplus, making people better off than they would be if the good had not been invented. This well-known argument is usually framed in a context where people are identical, everybody's demand curve for the newly-invented good is the same and everybody shares to some extent in the residual surplus. However, when the newly-invented good is indivisible - like a heart transplant or the treatment of AIDS, where, in effect, a person consumes either one full unit of the good or none - the effect of a patent is to concentrate the entire benefit of the patented good upon the rich, leaving the poor no better off than if the good had not been invented.

Keywords: Patents; Indivisible Goods (search for similar items in EconPapers)
JEL-codes: D83 K11 O34 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2004-04
New Economics Papers: this item is included in nep-upt
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1018.pdf First version 2004 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:1018

Access Statistics for this paper

More papers in Working Paper from Economics Department, Queen's University Contact information at EDIRC.
Bibliographic data for series maintained by Mark Babcock ().