Type
Article
Title
Runner-up patents: is monopoly inevitable?
In
The Scandinavian journal of economics
Editor
SE : Almqvist & Wiksell
Volume
112
Number
2
Pages
417 - 441 p.
ISSN
03470520
Abstract
EN
Exclusive patents sacrifice product competition to provide firms incentives to innovate. We characterize an alternative mechanism whereby later inventors are allowed to share the patent if they discover within a certain time period of the first inventor. These runner-up patents increase social welfare under very general conditions. Furthermore, we show that the time window during which later inventors can share the patent should become a new policy tool at the disposal of the designer. This instrument will be used in a socially optimal mix with the breadth and length of the patent and could allow sorting between more or less efficient firms.

BIBLIOGRAPHIC QUOTE
EXPORT