<abstract xmlns="http://www.w3.org/1999/xhtml"><p>In this paper, we consider the impact of patents and R&amp;D cooperation on R&amp;D investments in the oligopolistic industry with differentiated products. Four types of firms’ conduct are investigated: R&amp;D competition without patents, R&amp;D competition with patent protection, R&amp;D cooperation, and the full industry cooperation. The obtained results suggest that patents do not necessarily promote R&amp;D investments due to the existence of so called tournament effects. R&amp;D cooperation stimulates R&amp;D investments, but R&amp;D cooperation provides sufficient incentives to create a full industry cartel. Such a cartel works to the detriment of consumers. Our analysis led us to the conclusion that for a relatively low level of R&amp;D spillovers, the policy-makers should promote R&amp;D competition without patent protection among oligopolistic firms. For a relatively high level of R&amp;D spillovers, R&amp;D cooperation enhances innovation, but the regulator should monitor the market for probable collusion.</p></abstract>

In this paper, we consider the impact of patents and R&D cooperation on R&D investments in the oligopolistic industry with differentiated products. Four types of firms’ conduct are investigated: R&D competition without patents, R&D competition with patent protection, R&D cooperation, and the full industry cooperation. The obtained results suggest that patents do not necessarily promote R&D investments due to the existence of so called tournament effects. R&D cooperation stimulates R&D investments, but R&D cooperation provides sufficient incentives to create a full industry cartel. Such a cartel works to the detriment of consumers. Our analysis led us to the conclusion that for a relatively low level of R&D spillovers, the policy-makers should promote R&D competition without patent protection among oligopolistic firms. For a relatively high level of R&D spillovers, R&D cooperation enhances innovation, but the regulator should monitor the market for probable collusion.

The Impact of Patents and R&amp;D Cooperation on R&amp;D Investments in a Differentiated Goods Industry

Department of Business Economics, Collegium of World Economy

South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Impact of Patents and R&D Cooperation on R&D Investments in a Differentiated Goods Industry

In this paper, we consider the impact of patents and R&D cooperation on R&D investments in the oligopolistic industry with differentiated products. Four types...

The Impact of Patents and R&D Cooperation on R&D Investments in a Differentiated Goods Industry

Published Online: Jun 15, 2020

Page range: 122 - 133

DOI: https://doi.org/10.2478/jeb-2020-0010

Keywords
research and development, investments, patents, cooperation, differentiated goods

© 2020 Adam Karbowski et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Impact of Patents and R&D Cooperation on R&D Investments in a Differentiated Goods Industry

Published Online: Jun 15, 2020

Page range: 122 - 133

DOI: https://doi.org/10.2478/jeb-2020-0010

Keywordsresearch and development, investments, patents, cooperation, differentiated goods

© 2020 Adam Karbowski et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
research and development, investments, patents, cooperation, differentiated goods