Giving Away the Game? The Impact of the Disclosure Effect on the Patenting Decision

Abstract:     
This article explores the propensity to patent in the light of the disclosure effect. Unlike earlier approaches concerned with the patenting decision, we take into account that a disclosure effect may decrease the merits of patenting by facilitating inventing around the patent for competitors. In our theoretical model, we find that the disclosure effect - contingent on the competitive environment of the inventor - possibly has substantial negative effects on the propensity to patent. An empirical investigation of the theoretical results finds support for the proposed effects.

Number of Pages in PDF File: 38

Keywords: patenting decision, secrecy, disclosure requirement, patent breadth, horizontal product differentiation, circular city

JEL Classification: L13, L24, O34

working papers series