Autori
Ottoz, Elisabetta
Cugno, Franco

Titolo
Static inefficiency of compulsory licensing: quantity vs. price competition
Periodico
Università degli studi di Torino. Dip. Di Economia e Statistica Cognetti de Martiis. Working paper series
Anno: 2006 - Fascicolo: 6 - Pagina iniziale: 1 - Pagina finale: 18

A common argument against compulsory licensing of intellectual property maintains that it facilitates the entry of inefficient producers, which may reduce social welfare independently of any effects on R&D incentives. We study the issue in a model where the innovative firm, under the threat of compulsory licensing, react strategically by choosing between quantity and price competition. We show that the risk of a reduction in static welfare due to the entry of highly inefficient firms is avoided if licensing entails a royalty per unit of output and zero fixed fee. The rationale behind this result lies in the fact that compulsory licensing threat works as a disciplining device to improve static social welfare, even when the applicant is a high cost inefficient firm.



Testo completo: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2006dip/6_wp_cugnoottoz.pdf

Esportazione dati in Refworks (solo per utenti abilitati)