Intellectual Property, Competition, and Information Technology

This paper was prepared as a companion to the Mattioli Lectures delivered by Hal R. Varian, “Economics of Information Technology,†available at: http://www.sims.berkeley.edu/~hal/Papers/mattioli/mattioli.pdf. Professor Varian’s overview analyzes a variety of competitive strategies used by high-tech companies. These strategies—such as personalized pricing, lock-in, and the adoption of uniform compatibility standards to fuel bandwagon effects—often rely on intellectual property, typically copyrights or patents. Since Professor Varian does not explore this issue at length, we complement his work by focusing on it.