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dc.contributor.authorBrekke, Kurt Richard
dc.contributor.authorStraume, Odd Rune
dc.date.accessioned2006-07-05T10:28:51Z
dc.date.available2006-07-05T10:28:51Z
dc.date.issued2005-11
dc.identifier.issn0804-6824
dc.identifier.urihttp://hdl.handle.net/11250/162674
dc.description.abstractWe 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.extent306500 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoengen
dc.publisherNorwegian School of Economics and Business Administration. Department of Economicsen
dc.relation.ispartofseriesDiscussion paperen
dc.relation.ispartofseries2005:22en
dc.subjectmarketingen
dc.subjectresearch & developmenten
dc.subjectpharmaceuticalsen
dc.titlePharmaceutical patents : incentives for R&D or marketing?en
dc.typeWorking paperen


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