Patents Hinder Collusion

Klaus Kultti (), Tuomas Takalo and Juuso Toikka
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Tuomas Takalo: University of Toulouse & Bank of Finland
Juuso Toikka: Helsinki School of Economics

Industrial Organization from EconWPA

Abstract: We argue that a patent system makes collusion among innovators more difficult. Our simple argument is based on two properties of the patent system. First, a patent not only protects against infringement but also against retaliation by former collusion members. Second, a deviator has an equal chance with former collusion members to get a patent on new innovations. We show that if a patent system reduces spillovers, it renders collusion impossible. Moreover, it is possible to design a patent system that simultaneously increases knowledge spillovers and eliminates collusion

Keywords: Patens; Collusion; Secrecy; Innovation (search for similar items in EconPapers)
JEL-codes: L (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind and nep-ino
Date: 2005-03-31
Note: Type of Document - pdf; pages: 27
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpio:0503015

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