Ponce, Carlos J. - Departamento de Economía, Universidad Carlos III de Madrid - 2007
We study a model in which an inventor discloses knowledge about its innovation and then a rival chooses the probability … receiving a patent for its invention (legal externality), but, by revealing knowledge, they decrease the marginal cost of R …&D (knowledge externality). We stress the following result. If the knowledge externality is large compared to the legal externality …