NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Patent Races, Product Standards, and International Competition

Richard A. Jensen, Marie Thursby

NBER Working Paper No. 3870 (Also Reprint No. r2034)
Issued in October 1991
NBER Program(s):   ITI   IFM

We examine anticipatory product standards intended to improve the strategic position of firms in an international patent race where firms do R&D to develop products that are close substitutes. The effects of a standard are shown to depend on the way the standard is specified, which firm develops which product, and on the order in which products are discovered. Simple standards are, in general, time inconsistent because of consumer losses that occur when products ruled out by the standard are discovered before the product set as the standard. A state contingent standard is shown to be time consistent when compulsory licensing by the foreign firm is introduced.

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Document Object Identifier (DOI): 10.3386/w3870

Published: International Economic Review, Volume 37, #1, pp. 21-49, February 1996

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