Patent scope consists of three basic dimensions,:
breadth, height, and length. We construct a simple oligopoly model
that encompasses these three dimensions to analyse the impacts of various policy alternatives through varying these three dimensions of patents. In particular, our model embodies interactions between early R&D by "innovators" and late R&D by "imitators" who sell their (mutually substitutable) products in an oligopolistic market.
We thereby draw attention to the intricate fact that the classical simplistic discussion on whether policy should discourage or encourage R&D cannot be correctly carried out without specifying [i] whether we are dealing with innovators or imitators, [ii] which of the three dimensions of patent scope to focus on, and last but not least, [iii] the nature of product market in early and late stages of the product life cycle.
(2002.07.24)