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Socially excessive dissemination of patent licences

Anthony Creane

Canadian Journal of Economics/Revue canadienne d'économique, 2009, vol. 42, issue 4, 1578-1598

Abstract: 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. En comparaison avec l'optimum social, un monopoleur habituellement vend trop peu. Voilà qui semble tenir pour le cas d'un laboratoire qui vend des licences pour une innovation brevetée qui réduit les coûts: Katz & Shapiro (1986) ont montré dans quelles conditions le laboratoire va émettre moins que le nombre optimal de licences. Cependant, l'auteur découvre que les incitations peuvent plutôt l'amener à en émettre trop, plus que l'optimum social. Par exemple, il se peut que la maximisation du profit amène à vendre plusieurs licences alors qu'il serait socialement optimal de n'en vendre aucune.

Date: 2009
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https://doi.org/10.1111/j.1540-5982.2009.01559.x

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