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- Title
Runner-up Patents: Is Monopoly Inevitable?
- Authors
Henry, Emeric
- Abstract
Exclusive patents sacrifice product competition to provide firms incentives to innovate. We characterize an alternative mechanism whereby later inventors are allowed to share the patent if they discover within a certain time period of the first inventor. These runner-up patents increase social welfare under very general conditions. Furthermore, we show that the time window during which later inventors can share the patent should become a new policy tool at the disposal of the designer. This instrument will be used in a socially optimal mix with the breadth and length of the patent and could allow sorting between more or less efficient firms.
- Subjects
PATENTS; MONOPOLIES; ECONOMIC competition; INVENTORS; BUSINESS enterprises; TECHNOLOGICAL innovations; WELFARE economics
- Publication
Scandinavian Journal of Economics, 2010, Vol 112, Issue 2, p417
- ISSN
0347-0520
- Publication type
Article
- DOI
10.1111/j.1467-9442.2010.01603.x