Welfare-optimal patent royalties when imitation is costly
| Autor: | John L. Turner, Fernando J Leiva Bertran |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Organizational Behavior and Human Resource Management
Economics and Econometrics Break-even (economics) Yield (finance) 05 social sciences Social planner Microeconomics 0502 economics and business Economics Compulsory license 050207 economics Monopoly Duopoly Imperfect competition Average cost 050205 econometrics |
| Zdroj: | Journal of Economic Behavior & Organization. 137:457-475 |
| ISSN: | 0167-2681 |
| Popis: | We identify welfare-optimal patent royalties in a model of costly imitation, entry and imperfect competition. When the social planner may impose a compulsory license, optimal royalties either blockade imitation, facilitating unregulated monopoly, or yield an aggregate-zero-profit efficient duopoly. When duopoly is optimal, the optimal per-unit royalty pins the equilibrium price at the aggregate average cost and the optimal fixed royalty shifts surplus so the patentee and imitator break even. Efficient duopoly yields higher welfare than monopoly for sufficiently low invention cost, and may also yield higher welfare than a prize system. Interestingly, royalty payments may be negative. Because of this, efficient duopoly may not be feasible if the planner must instead direct the courts to use such royalties. |
| Databáze: | OpenAIRE |
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