dc.contributor.author | Brekke, Kurt Richard | |
dc.contributor.author | Straume, Odd Rune | |
dc.date.accessioned | 2006-07-05T10:28:51Z | |
dc.date.available | 2006-07-05T10:28:51Z | |
dc.date.issued | 2005-11 | |
dc.identifier.issn | 0804-6824 | |
dc.identifier.uri | http://hdl.handle.net/11250/162674 | |
dc.description.abstract | We analyse how a patent-holding pharmaceutical firm may strategically use advertising
of existing drugs to affect R&D investments in new (differentiated) drugs, and
thereby affect the probability distribution of future market structures in the industry.
Within a fairly general model framework, we derive exact conditions for advertising
and R&D being substitute strategies for the incumbent firm and show that it may
overinvest in advertising to reduce the incentive for an entrant to invest in R&D,
thereby reducing the probability of a new product on the market. In a more specific
setting of informative advertising, we show that such overinvestment incentives are
always present, and that more generous patent protection implies that a larger share
of the patent rent is spent on marketing, relative to R&D. | en |
dc.format.extent | 306500 bytes | |
dc.format.mimetype | application/pdf | |
dc.language.iso | eng | en |
dc.publisher | Norwegian School of Economics and Business Administration. Department of Economics | en |
dc.relation.ispartofseries | Discussion paper | en |
dc.relation.ispartofseries | 2005:22 | en |
dc.subject | marketing | en |
dc.subject | research & development | en |
dc.subject | pharmaceuticals | en |
dc.title | Pharmaceutical patents : incentives for R&D or marketing? | en |
dc.type | Working paper | en |