To 'B' or Not To 'B': A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model
Hong Kong University of Science & Technology (HKUST) - Department of Economics
March 21, 2000
We study the welfare consequences of a government regulation that forces a patented equipment to be supplied by n independent producers. On the one hand, such a regulation hurts the value of a patent and therefore reduces activities in the R&D sector. On the other hand, the enhanced competition for the equipment improves efficiency in the manufacturing sector. Should we break up monopolies protected by intellectual property rights? The answer is no in a Romer-type growth model but we have sufficient reason to believe that the answer could be yes in a model advocated by Jones (1995).
Number of Pages in PDF File: 22
Keywords: R&D, Growth, Competition Policy
JEL Classification: O31, O38, O41working papers series
Date posted: May 22, 2000
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