Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Exclusive Contracts, Innovation, and Welfare

Yongmin Chen and David E. M. Sappington
American Economic Journal: Microeconomics
Vol. 3, No. 2 (May 2011), pp. 194-220
Stable URL: http://www.jstor.org/stable/41237190
Page Count: 27
  • Download ($10.00)
  • Subscribe ($19.50)
  • Cite this Item
Exclusive Contracts, Innovation, and Welfare
Preview not available

Abstract

We extend Philippe Aghion and Patrick Bolton's (1987) classic model to analyze the equilibrium incidence and impact of exclusive contracts in a setting where research and development (R&D) drives industry performance. An exclusive contract between an incumbent supplier and a buyer arises when patent protection and/or the incumbent's R&D ability are sufficiently pronounced. The exclusive contract generally reduces the entrant's R&D, and can reduce the incumbent's R&D. Exclusive contracts reduce welfare if the incumbent's R&D ability is sufficiently limited, but can increase welfare if patent protection and the incumbent's R&D ability are sufficiently pronounced.

Page Thumbnails

  • Thumbnail: Page 
194
    194
  • Thumbnail: Page 
195
    195
  • Thumbnail: Page 
196
    196
  • Thumbnail: Page 
197
    197
  • Thumbnail: Page 
198
    198
  • Thumbnail: Page 
199
    199
  • Thumbnail: Page 
200
    200
  • Thumbnail: Page 
201
    201
  • Thumbnail: Page 
202
    202
  • Thumbnail: Page 
203
    203
  • Thumbnail: Page 
204
    204
  • Thumbnail: Page 
205
    205
  • Thumbnail: Page 
206
    206
  • Thumbnail: Page 
207
    207
  • Thumbnail: Page 
208
    208
  • Thumbnail: Page 
209
    209
  • Thumbnail: Page 
210
    210
  • Thumbnail: Page 
211
    211
  • Thumbnail: Page 
212
    212
  • Thumbnail: Page 
213
    213
  • Thumbnail: Page 
214
    214
  • Thumbnail: Page 
215
    215
  • Thumbnail: Page 
216
    216
  • Thumbnail: Page 
217
    217
  • Thumbnail: Page 
218
    218
  • Thumbnail: Page 
219
    219
  • Thumbnail: Page 
220
    220