This article analyzes the effects of intellectual property rights protection on innovation in a quality-ladder model in which part of the consumers value being the exclusive consumers of the newest generation of a good. In the case of a monopoly innovator, we show that reducing IP protection can...

This paper develops a three-stage model of innovation, fixed-fee licensing and production to evaluate the welfare effects of compulsory licensing, taking into account both static (information sharing) and dynamic (innovation incentive) effects. Compulsory licensing is shown to have an...