This paper examines the dynamically consistent price path for a new product monopolist, unable to commit to future prices, when consumers must incur setup costs of adopting the product. The authors find that setup costs give rise to a price path with introductory sales: along the path, periods...

Patents differ from other forms of intellectual property in that independent invention is not a defence to infringement. We argue that the patent rule is inferior in any industry where the cost of independently inventing a product is not too much less than (no less than half) the inventor's...