To what extent does patent protection change product market outcomes?
The granting of patent rights is a central public policy tool to incentivise innovation, but the incentive that patents offer works indirectly. Rather than directly subsidising R&D costs (as in other mechanisms, such as tax credits), or attempting to make up for any differences between the public and private incentives to research, patents provide incentive through product market protection.
This project aims to provide the first experimental evidence of the market protection that patents provide. In particular, do products protected by patents face fewer competitor products? Do they achieve higher market shares? Higher profit margins?