Fragmented property rights and incentives for R&D

Derek J. Clark and Kai Konrad

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: Where product innovation requires several complementary patents, fragmented property rights can limit firms' willingness to invest in R&D. We consider the research intensity in multiple simultaneous R & D contests and how it depends on whether firms already hold relevant patents as well as the availability of an option to invent around. A measure of technological uncertainty is also analyzed. The multiple patent product involves an important hold-up problem that can reduce the overall R&D effort. Invent-around options moderate this problem. We also analyze targeted equilibria in which the aim of R&D can be to hold up a rival. © 2008 INFORMS.

Keywords: Contests; Fragmented property rights; Hold-up; Inventing around; Patents; R and D; Research and development management; Uncertainty analysis; Patents and inventions (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (28)

Published in Management Science 5 54(2008): pp. 969-981

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Journal Article: Fragmented Property Rights and Incentives for R& D (2008)
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