Intellectual Property Rights and International R&D Competition
June 1, 2001
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Summary
This paper examines a country's incentives for intellectual property rights (IPR) protection in a global trading environment. There is a time inconsistency problem intrinsic to IPR protection: ex ante strong protection is warranted to promote innovation, but once discovery takes place there is an incentive to lower protection. The sub optimal but time consistent policy involves an insufficient level of protection and, therefore, of innovation. In more technologically advanced economies reputational considerations may be sufficient to maintain strong protection. Otherwise a commitment mechanism, such as participation in the World Trade Organization, or, more controversially, some form of bilateral punishment, may be used.
Subject: Competition, Consumption, Economic sectors, Financial markets, Foreign corporations, Income, National accounts, Personal income, Tax incentives, Technology
Keywords: commitment IPR Policy, Competition, consumer surplus, Consumption, Foreign corporations, Global, home government, imitation, Income, innovation, Intellectual property rights, IPR policy, IPR protection, IPR regime, monopoly profits, time inconsistency, WP
Pages:
24
Volume:
2001
DOI:
Issue:
081
Series:
Working Paper No. 2001/081
Stock No:
WPIEA0812001
ISBN:
9781451850369
ISSN:
1018-5941
