We investigate how intensive should be the monitoring effort and how the reaction of the patentholder may influence the entry decision. In a simultaneous game we show that even if the penalty paid by the infringer and the settlement cost are high, the patentholder may decide to choose a...

In this paper, we develop a continuous time duopoly model of irreversible investment under uncertainty, where each player may learn about the profitability of an investment by observing the experience of his rival, as well as some costless background information. We show that the resulting war...