One reason firms engage in research and development is to lower production costs. Strong patent protection provides an additional incentive because firms may earn royalties from licensing their discoveries. This paper models the decision to engage in process research and development in a duopoly. A three stage game is posited and the equilibrium quantity and price of knowledge is calculated under various assumptions.
Major Themes in Economics
©2004 by Major Themes in Economics
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
"R & D Exchange in a Duopoly with Strong Patent Protection,"
Major Themes in Economics, 6, 3-22.
Available at: https://scholarworks.uni.edu/mtie/vol6/iss1/3