Collaboration and Disclosure in Dynamic R&D Races
43 Pages Posted: 16 Mar 2012
Date Written: March 13, 2012
Recent models of multi-stage R&D have shown that a system of weak intellectual property rights may lead to faster innovation by inducing firms to share intermediate technological knowledge. However, I argue that the positive effect of weak intellectual property regimes on the sharing of intermediate technological knowledge vanishes when technology is complex, as is likely to be the case in many high-tech industries. Under this condition, technologically complex discoveries that are disclosed by a technological leader can be ignored by the follower, who does so when it can free ride off the research of the rival, since ignoring the disclosure encourages more research by the leader.
Keywords: dynamic patent races, intellectual property rights, imitation, knowledge sharing, cumulative innovation, not invented here syndrome
JEL Classification: L5, L2, D9
Suggested Citation: Suggested Citation