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On the Social Desirability of Patents for Sequential Innovations in a Vertically Differentiated Market

Luca Lambertini () and Piero Tedeschi ()

No 20060502, Working Papers from Università degli Studi di Milano-Bicocca, Dipartimento di Statistica

Abstract: We consider a market for vertically differentiated goods where firms enter over time, after having developed innovations characterised by different quality levels. We show that patent height and length interact to determine the ultimate emergence of duopoly. In general, imposing quality improvements on later entrants entails the persistence of monopoly, while a duopoly equilibrium emerges when the second innovator is allowed to produce a sufficiently inferior quality and the patent protection granted to the first innovator is not too long-lasting.

Keywords: innovation; patent height; product quality (search for similar items in EconPapers)
JEL-codes: L12 L13 O31 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2006-05
New Economics Papers: this item is included in nep-com and nep-mic
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Citations: View citations in EconPapers (1) Track citations by RSS feed

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Related works:
Journal Article: On the Social Desirability of Patents for Sequential Innovations in a Vertically Differentiated Market (2007) Downloads
Working Paper: On the Social Desirability of Patents for Sequential Innovations in a Vertically Differentiated Market (2000) Downloads
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