Patent Protection and R&D Incentives Under Incomplete Information

Srobonti Chattopadhyay () and Rittwik Chatterjee ()
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Srobonti Chattopadhyay: University of Calcutta
Rittwik Chatterjee: Centre for Studies in Social Sciences, Calcutta

Journal of Quantitative Economics, 2019, vol. 17, issue 3, No 11, 699-705

Abstract: Abstract When tournament effect is negative, under complete information, whether patent protection increases the incentive for R&D is ambiguous. It depends on the extent of spillover of the new technology. In particular if that amount is less than a threshold value then patent protection increases the incentive for R&D, otherwise it does not. This note considers incomplete information framework where the spillover parameter is private information. In this framework it is shown that there are situations where patent protection unambiguously increases incentive for R&D. This happens if the distribution function of the spillover parameter is sufficiently skewed and the cost of doing research is sufficiently high even when tournament effect is negative.

Keywords: R&D incentives; Cournot duopoly; Spillovers; Incomplete information; Patent protection; Tournament effect (search for similar items in EconPapers)
JEL-codes: D43 D82 L13 O31 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40953-018-0153-4

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