Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94124
Authors: 
Schmidt, Klaus M.
Year of Publication: 
2008
Series/Report no.: 
SFB/TR 15 Discussion Paper 249
Abstract: 
Many high technology goods are based on standards that require access to several patents that are owned by different IP holders. We investigate the royalties chosen by IP holders under different market structures. Vertical integration of an IP holder and a downstream producer solves the double mark-up problem between these firms. Nevertheless, it may raise royalty rates and reduce output as compared to non-integration. Horizontal integration of IP holders (or a patent pool) solves the complements problem but not the double mark-up problem. Vertical integration discourages entry and reduces innovation incentives, while horizontal integration always encourages entry and innovation.
JEL: 
L15
O31
L24
O32
K11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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