| By: |
Debi Prasad Mohapatra;
Vatsala Shreeti |
| Abstract: |
Why would a market leader choose not to patent an innovation? We study
Samsung's decision to forgo patent protection for dual SIM technology in the
Indian mobile handset market. Using a structural model of demand and supply
estimated on quarterly product-level data from the Indian mobile handset
industry, we document that rival firms' dual SIM products generated a
preference discovery externality. Rival firms' widespread adoption of the dual
SIM technology allowed consumers to discover the value of the technology, also
benefiting Samsung itself. Counterfactual simulations show that a patent would
have suppressed this externality, reducing Samsung's equilibrium profits
despite holding monopoly rights. Voluntary non-patenting was therefore
privately optimal. Our findings shed light on wider debates about
open-sourcing in software and other markets. |
| Keywords: |
innovation, patenting, telecom, preference discovery |
| JEL: |
L13 O33 O34 L63 |
| Date: |
2026–04 |
| URL: |
https://d.repec.org/n?u=RePEc:bis:biswps:1344 |