A Unified Framework for Competition Policy and Innovation Policy

18 Pages Posted: 14 Dec 2013 Last revised: 12 Jun 2014

See all articles by Keith N. Hylton

Keith N. Hylton

Boston University - School of Law

Date Written: June 11, 2014

Abstract

I describe a model of competition law enforcement that treats competition and innovation policy as the inseparable partners they ought to be. The enforcement authority determines an optimal punishment knowing that if it sets the penalty too high it will reduce firms’ incentives to invest in innovation, and if firms do not invest, new goods and new markets will not be created. The authority therefore moderates the penalty in order to maintain innovation incentives. The implications of this framework for competition policy and for innovation policy are quite different from what is commonly observed today. I discuss implications for competition law enforcement, standard essential patents, and the Supreme Court’s decision in FTC v. Actavis.

Keywords: competition policy, innovation policy, monopoly, antitrust enforcement, patent infringement, standard essential patent, FRAND, FTC v. Actavis

JEL Classification: K11, K11, K19, K21

Suggested Citation

Hylton, Keith N., A Unified Framework for Competition Policy and Innovation Policy (June 11, 2014). Boston Univ. School of Law, Law and Economics Research Paper No. 13-55. Available at SSRN: https://ssrn.com/abstract=2367283 or http://dx.doi.org/10.2139/ssrn.2367283

Keith N. Hylton (Contact Author)

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-8959 (Phone)
617-353-3077 (Fax)

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