Taste for Exclusivity and Intellectual Property Rights

Christian Kiedaisch and Dominik Grafenhofer

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: This article analyzes the effects of intellectual property rights protection on innovation in a quality-ladder model in which part of the consumers value being the exclusive consumers of the newest generation of a good. In the case of a monopoly innovator, we show that reducing IP protection can increase the average innovation rate by regularly destroying exclusivity and thereby creating incentives to invent new exclusive goods. In the case where R&D is undertaken by entrants, the innovation rate, however, increases in the strength of IP protection for most market structures. In each case, we derive the welfare-maximizing strength of IP protection.

JEL-codes: L40 O31 O34 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr and nep-pr~
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:80017

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