Intellectual property rights protection,Rival's asymmetry and differentiated products

Abstract

This study focuses on a conflict of interests regarding the intellectual property rights protections (IPRs) regime in a North-South context.In order to examine reaction of each related party,a duopolistic cournot game with cost-reducing R&D model is employed.We observe and compare equilibrium outcomes of 2 regimes : no protection regime and full protection regime.The mian feature of this study is an introduction of product differentiation between the North and the South products.The model of Poyago-Theotoky and Teerasuwannajak (2012) is extended to study the consequences of different degrees of product differentiation on the conflict of interests.The analysis leads to 2 main results :1.) IPR protection may fail to strengthen private R&D incentives if products are significantiy differentiated even when R&D productivity of the two countries are very different 2.)The conflict regarding the strength of IPRs protection regime is less severe as products become more differentiated.