Patent races optimal with respect to entry

John Hartwick

International Journal of Industrial Organization, 1991, vol. 9, issue 2, 197-207

Abstract: We introduce a patent (prize) which induces entry at a level which satisfies the basic condition of optimality with respect to the 'size' of the race (a second best patent). We observe that for the Lee-Wilde model of a patent race the second best prize induces approximately the socially optimal (first best) outcome. The approach of the second best patent provides one explanation for why discoverers should only receive a fraction of the ex post social value of their discovery.

Date: 1991
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Related works:
Working Paper: Patent Races Optimal with Respect to Entry (1988)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:9:y:1991:i:2:p:197-207

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