2010 | OriginalPaper | Buchkapitel
The Decision to Patent with Horizontal Product Differentiation
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In this chapter we introduce the patenting decision into an oligopolistic model of horizontally differentiated products. The analysis presented here in large parts follows Zaby (2009b).We assume that a drastic product innovation is released on a new market where rivals may enter with non-infringing products as long as patent protection is not perfect. Product characteristics are assumed to be continuously distributed on a circle of unit-circumference where a patent protects a given range on the circle from the entry of rival firms.