Acquisitions for Sleep

Research output: Contribution to journalArticle

Abstract

Within the policy debate, there is a fear that large incumbent firms buy small firms' inventions to ensure that they are not used in the market. We show that such "acquisitions for sleep" can occur if and only if the quality of a process invention is small; otherwise, the entry profit will be higher than the entry-deterring value. We then show that the incentive for acquiring for the purpose of putting a patent to sleep decreases when the intellectual property law is stricter because the profit for the entrant then increases more than the entry-deterring value does.

Details

Authors
Organisations
External organisations
  • Research Institute of Industrial Economics
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • acquisitions, innovation, IP law, ownership, sleeping patents
Original languageEnglish
JournalB.E. Journal of Economic Analysis and Policy
Volume20
Issue number2
Publication statusPublished - 2020 Feb 26
Publication categoryResearch
Peer-reviewedYes