Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73389
Authors: 
Kleer, Robin
Year of Publication: 
2008
Series/Report no.: 
BGPE Discussion Paper 61
Abstract: 
Big companies and small innovation factories possess different advantages in a patent contest. While large firms typically have a better access to product markets, small firms often have a superior R&D efficiency. In this paper I model a patent contest with asymmetric firms. In a pre-contest acquisition game large firms bid sequentially for small firms to combine respective advantages. Sequential bidding allows the first large firm to wait strategically and let the other firm acquire. For low efficiencies this leads to an asymmetric market structure even though the initial situation is symmetric. Furthermore, acquisitions increase the chances for a successful innovation.
Subjects: 
patent contest
sequential acquisitions
JEL: 
O31
L24
G34
Document Type: 
Working Paper

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