Managing Public IP with Downstream Interfirm Research Spillovers

摘要

The paper examines the economic impact of pricing and access to public basic research-related intellectual property (IP) in the presence of downstream interfirm spillovers using a Salop circle model of monopolistic competition. Depending on the nature and extent of spillovers and with free access to upstream basic research, firm entry can be excessive, insufficient, or socially optimal. When interfirm lump-sum spillovers are absent or sufficiently small, competitive entry is excessive, so policies that restrict access to basic research IP can enhance social welfare. When lump-sum research spillovers are sufficiently large, policies to induce entry and a clustering of downstream research activity can be welfare enhancing.