2009/05 | LEM Working Paper Series | |
Appropriability, Patents, and Rates of Innovation in Complex Products Industries |
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Luigi Marengo, Corrado Pasquali, Marco Valente, and Giovanni Dosi |
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Keywords | ||
Patents; Appropriability of Innovation; Complex Product Industries; Industrial Dynamics
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JEL Classifications | ||
O31, O34, L11
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Abstract | ||
The economic theory of intellectual property rights is based on a
rather narrow view of both competition and technological knowledge. We
suggest some ways of enriching this framework with a more empirically
grounded view of both and, by means of a simulation model, we analyze
the impact of different property right regimes on the dynamics of a
complex product industry, that is an industry where products are
complex multi-component objects and competition takes place mainly
through differentiation and component innovation. We show that, as the
complexity of the product spaces increases, stronger patent regimes
yield lower rates of innovation, lower product quality and lower
consumers' welfare. |
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