The welfare cost of one-size-fit-all patent protection Report as inadecuate




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Abstract

To analyze the welfare gain from allowing for differentiated patent protection across sectors, this study develops a two-sector quality-ladder growth model in which patent breadth is a policy variable and derives the optimal patent breadth under two policy regimes. We show that i the optimal uniform patent breadth is a weighted average of the optimal sector-specific patent breadth, and ii the optimal sector-specific patent breadth is larger in the sector that has a larger market size and more technological opportunities. To derive the optimal policy, we allow for an arbitrary path of patent breadth and derive the optimal path by solving a Stackelberg differential game. We find that the optimal path of patent breadth under each regime is stationary, time-consistent and subgame perfect. Finally, we perform a numerical investigation and find that even a moderate degree of asymmetry across sectors can generate a significant welfare cost of uniform patent protection.



Item Type: MPRA Paper -

Original Title: The welfare cost of one-size-fit-all patent protection-

Language: English-

Keywords: economic growth; RandD; uniform patent protection; time-consistent patent policy-

Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual CapitalO - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and IncentivesO - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General-





Author: Chu, Angus C.

Source: https://mpra.ub.uni-muenchen.de/21401/







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