erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

Growth Maximizing Patent Life-Time

Alberto Bucci (Universite Catholique de Louvain, Belgium)
Huseyin Cagri Saglam (Universite Catholique de Louvain, Belgium)

Abstract

Using a vetical differentiation model of endogenous growth with stochastic R&D activity, we characterize the optimal patent life-time, the government would set in order to maximize economic growth. We show that a finite patent life-time does exist and is unique provided that the expected rate of return from R&D is sufficiently large. Additionally, we analyze the impact of the level of competition in R&D sector, the interest rate, the level of monopoly profit and the productivity parameter of research technology on this optimal patent life-time.

Economic Research Center
Middle East Technical University
06531 Ankara Turkey
Phone: + 90 312 210 3044, 210 2003
Fax: +90 312 210 1244
e-mail: metuerc@metu.edu.tr