Fragmented property rights and R&D competition

Clark, Derek J. and Konrad, Kai A. (June 2006): Fragmented property rights and R&D competition. SFB/TR 15 Discussion Paper No. 123

Abstract

Where product innovation requires several complementary patents, fragmented property rights can be a factor that limits firms’ willingness to invest in the development and commercialization of new products. This paper studies multiple simultaneous R&D contests for complementary patents and how they interact with patent portfolios that firms may have acquired already. We also consider how this interaction and the intensity of the contests depends on the type of patent trade regimes and the product market equilibria that result from these regimes. We solve for the contest equilibria and show that the multiple patent product involves an important hold-up problem that considerably reduces the overall contest effort.

• Item Type: Paper (Discussion Paper)
• Keywords: fragmented property rights, patents, contests, hold-up, R&D, patent pools, licensing
• Collections: Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A2 - Konflikte in Organisations- und Steuerungsproblemen
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: D44
• Language: English