Title
Patent Races, Product Standards, and International Competition
Author
Richard Jensen, University of Notre Dame - Department of Economics and Econometrics, and Marie Thursby, Georgia Institute of Technology - Strategic Management Area; Emory University - Department of Economics; National Bureau of Economic Research (NBER)
Date
1/01/2005
(Original Publish Date: 1991)
(Original Publish Date: 1991)
Abstract
The authors examine anticipatory product standards intended to improve the strategic position of firms in an international patent race where firms do R&D to develop products that are close substitutes. The effects of a standard depend on the way the standard is specified, which firm develops which product, and the order of discovery. Simple standards can be time inconsistent because of consumer losses that occur when products ruled out by the standard are discovered first. A state-contingent standard is shown to be time consistent when compulsory licensing by the foreign firm is introduced.
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