Patent Races, Product Standards, and International Competition

37 Pages Posted: 22 Jun 2004 Last revised: 31 Jul 2021

See all articles by Richard A. Jensen

Richard A. Jensen

University of Notre Dame - Department of Economics

Marie C. Thursby

Georgia Institute of Technology - Strategic Management Area; National Bureau of Economic Research (NBER)

Date Written: October 1991

Abstract

We examine anticipatory product standards intended to improve the strategic position of firms in an international patent race where firms do R&D to develop products that are close substitutes. The effects of a standard are shown to depend on the way the standard is specified, which firm develops which product, and on the order in which products are discovered. Simple standards are, in general, time inconsistent because of consumer losses that occur when products ruled out by the standard are discovered before the product set as the standard. A state contingent standard is shown to be time consistent when compulsory licensing by the foreign firm is introduced.

Suggested Citation

Jensen, Richard A. and Thursby, Marie C., Patent Races, Product Standards, and International Competition (October 1991). NBER Working Paper No. w3870, Available at SSRN: https://ssrn.com/abstract=226746

Richard A. Jensen (Contact Author)

University of Notre Dame - Department of Economics ( email )

Notre Dame, IN 46556
United States

Marie C. Thursby

Georgia Institute of Technology - Strategic Management Area ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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