Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94137
Authors: 
Jansen, Jos
Year of Publication: 
2010
Series/Report no.: 
SFB/TR 15 Discussion Paper 339
Abstract: 
An innovative firm with private information about its indivisible process innovation chooses strategically whether to apply for a patent with probabilistic validity or rely on secrecy. By doing so, the firm manages its rivals' beliefs about the size of the innovation, and affects the incentives in the product market. A Cournot competitor tends to patent big innovations, and keep small innovations secret, while a Bertrand competitor adopts the reverse strategy. Increasing the number of firms gives a greater (smaller) patenting incentive for Cournot (Bertrand) competitors. Increasing the degree of product substitutability increases the incentives to patent the innovation.
Subjects: 
Bertrand and Cournot competition
oligopoly
productdifferentiation
JEL: 
D82
L13
O31
O32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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