Intellectual Property and Market Size
Posted: 25 Jul 2008
Date Written: March 2005
Intellectual property protection involves a trade-off between the undesirability of monopoly and the desirable encouragement of creation and innovation. As the scale of the market increases, due either to economic and population growth or to the expansion of trade through treaties such as the World Trade Organization, this trade-off changes. We show that, generally speaking, the socially optimal amount of protection decreases as the scale of the market increases. We also provide simple empirical estimates of how much it should decrease.
Keywords: Intellectual Property, International Trade, Innovation, Harmonization, Monopoly
JEL Classification: X15, X16
Suggested Citation: Suggested Citation