2020

Acquisition for Sleep

Reprint No. 2020:34

Author(s): Lars Persson, Pehr-Johan Norbäck and Charlotta OlofssonYear: 2020 Title: B.E. Journal of Economic Analysis and Policy Volume (No.): 20 (2)
Online article (restrictions may apply)


Within the policy debate, there is a fear that large incumbent firms buy small firms’ inventions to ensure that they are not used in the market. We show that such “acquisitions for sleep” can occur if and only if the quality of a process invention is small; otherwise, the entry profit will be higher than the entry-deterring value. We then show that the incentive for acquiring for the purpose of putting a patent to sleep decreases when the intellectual property law is stricter because the profit for the entrant then increases more than the entry-deterring value does.


Reference:
Persson, Lars, Pehr-Johan Norbäck and Charlotta Olofsson (2020), "Acquisition for Sleep". B.E. Journal of Economic Analysis and Policy 20(2), .

Pehr-Johan Norbäck

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Lars Persson

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lars.persson@ifn.se

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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