Using Patents to Mislead Rivals

26 Pages Posted: 1 Apr 2005

See all articles by Corinne Langinier

Corinne Langinier

University of Alberta - Department of Economics

Abstract

Firms claim they do not rely heavily on patents. Yet they patent, as indicated by the large number of patents that are granted. This paper offers a possible resolution to this puzzle. It takes a simplified version of a duopoly innovation race and studies the patenting decision of an innovator who has private information about the improvability of her innovation. It is shown that a firm may use the patenting decision to mislead her rival. Under symmetric information, research can be stimulated but not disclosed. However, under asymmetric information, disclosure is more likely, even though research incentive may be weakened.

JEL Classification: 031, L1

Suggested Citation

Langinier, Corinne, Using Patents to Mislead Rivals. Available at SSRN: https://ssrn.com/abstract=696957

Corinne Langinier (Contact Author)

University of Alberta - Department of Economics ( email )

8-14 Tory Building
Edmonton, Alberta T6G 2H4
Canada

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