Socially excessive dissemination of patent licences

Anthony Creane

Canadian Journal of Economics, 2009, vol. 42, issue 4, 1578-1598

Abstract: Compared with the social optimum, a monopolist usually sells too little. This result seemingly includes the case of a lab that licences its patented cost innovation: Katz and Shapiro (1986) find `conditions under which [the lab] will issue fewer than the socially optimal number of licences.' However, I find instead that its incentives can be socially too high; the monopoly seller may sell too much. For example, it can be profit maximizing to sell several licences, while it is socially optimal that none is sold.

JEL-codes: D43 L24 (search for similar items in EconPapers)
Date: 2009
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