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The propensity to patent in oligopolistic markets

Alexandra Zaby ()

No 323, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: We analyze the strategic protection decision of an innovator between a patent and secrecy in a setting with horizontally differentiated products. By introducing the patenting decision into the well known circular city model, the impact of the disclosure requirement linked to a patent application as well as the problem of legally inventing around a patent can be taken into account. Asymmetry in the circular market leads to a consumer migration effect. We find that secrecy may be the innovator's profit maximizing strategy whenever the mandatory disclosure of information enhances the market entry of competitors.

Keywords: patenting decision; secrecy; disclosure requirement; patent breadth; horizontal product differentiation; circular city (search for similar items in EconPapers)
JEL-codes: L13 L24 O34 (search for similar items in EconPapers)
Date: 2009
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