The propensity to patent in oligopolistic markets
Alexandra Zaby ()
No 323, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics
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)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuedps:323
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