Abstract

https://ssrn.com/abstract=2795409
 


 



The Stationary Bandit Model of Intellectual Property


Sinclair Davidson


RMIT University - School of Economics, Finance and Marketing

Jason Potts


RMIT University

June 14, 2016


Abstract:     
We propose a new model of intellectual property that presents a different view to the market failure/monopoly rent model advanced by Arrow (1962) in which governments protect inventors from private theft. Instead, using Olson (1993), we represent a public theft model of intellectual property arising when entrepreneurs acting in global markets seek protection from a stationary bandit (their home government) principally against the depredations of other governments (the roving bandits). We argue that this model explains why institutional quality matters to the global location of R&D intensive industries, such as biopharma, and why so much intellectual property is located in tax havens.

Number of Pages in PDF File: 19

Keywords: intellectual property, stationary bandit model, institutional quality, tax havens

JEL Classification: D02, O34, D72, F51, F55, F61, H71, H87, K39


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Date posted: June 15, 2016  

Suggested Citation

Davidson, Sinclair and Potts, Jason, The Stationary Bandit Model of Intellectual Property (June 14, 2016). Available at SSRN: https://ssrn.com/abstract=2795409

Contact Information

Sinclair Davidson
RMIT University - School of Economics, Finance and Marketing ( email )
445 Swanston Street
Melbourne, Victoria 3000
Australia
+61-3-9925-5869 (Phone)
+61-3-9925-5986 (Fax)
Jason Potts (Contact Author)
RMIT University ( email )
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