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on Technology and Industrial Dynamics |
| By: | germán daniel lambardi |
| Abstract: | In this paper I study how innovation investment in a software duopoly is affected by the fact that one of the firms is, or might become Open Source. Firms can either be proprietary source (PS) or open source (OS), and have different initial technological levels. An OS firm is a for profit organization whose basic software is OS and it is distributed for free. The OS firm, however, is able to make profits from selling complementary software and, on the cost side; it receives development help from a community of users. I first compare a duopoly composed by two PS firms with a mixed duopoly of a PS and OS firm and I find that a PS duopoly might generate more innovation than a mixed duopoly if the initial technological gap between firms is small. However if this gap is large, a PS duopoly generates less innovation than a mixed duopoly. I then extend the setting to allow PS firms to switch to OS or to remain PS. A PS firm wants to become OS if it gets behind enough in the technological race against a competitor. I find that the outside option to become OS might soften competition on innovation since the technological leader prefers to reduce his innovation investment to avoid the OS switch of the follower. Therefore, although the switch to OS could generate higher investment levels ex-post it might generate lower investment ex-ante. In this context I find that a government subsidy to OS firms could be potentially harmful for innovation. |
| Date: | 2010–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:col:000130:007097&r=tid |
| By: | Moschini, GianCarlo |
| Abstract: | Research and Development (R&D) and innovation are crucial features of the seed industry. To support large R&D investments by the private sector, strong intellectual property rights, such as patents, are necessary. The exclusivity granted by patents naturally creates market power positions and raises difficult and unresolved competition issues in an antitrust context. |
| JEL: | L1 L4 O3 Q1 |
| Date: | 2010–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:31611&r=tid |
| By: | Bouguezzi, Fehmi |
| Abstract: | This paper studies and compares licensing regimes of a cost reducing innovation in a two dimensional square city where consumers are located in the interior of the square city and pay a quadratic transport cost when moving to one of the competing firms. The difference between results in this model and results in the other models of the existing literature is that here I find that royalties licensing is always better than fixed fee licensing independently of the size of the innovation. This result contradicts those found in a linear city à la Hotelling and in a circular city à la Salop. However, the paper shows that optimal licensing strategies for the patent holding firm are the same as in a Hotelling model where royalties are better for a non drastic innovation. |
| Keywords: | Technology transfer; Patent licensing; Square city |
| JEL: | O32 O31 C21 L24 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23158&r=tid |
| By: | Jolian McHardy (Department of Economics, The University of Sheffield Author-Person=pmc71); Tapan Biswas |
| Abstract: | This paper deals with strategic behaviour of firms in a duopoly, subsequent to the claim by one firm that it has reduced the unit cost of production. A variety of possible strategic equilibria are discussed in the context of a duopoly game between a multinational and a local firm. In the context of an extended uniform period of patenting, as finally agreed in the Uruguay round (1994), firms have increased incentive to take patents. In the presence of cost differences, the act of taking process-patents has implications for the equilibrium output strategies of the duopoly firms and sometimes may have a negative overall welfare effect for the local producer and consumers. |
| Keywords: | Asymmetric Information, Duopoly, Process Patenting, Repeated Games |
| JEL: | O12 D23 D43 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2010014&r=tid |