Using a dynamic model of patent races for two sequential innovations, Scotchmer & Green (1990) compared the effect on R&D incentives of the two patent-issuing rules, first-to-invent and first-to-file, and found first-to-file more conducive to R&D. We show that their result depends on their...

A monopoly facing potential entry may not want to develop an efficient technology even at zero R&D costs. Such a phenomenon occurs if a new technology is distinct from the existing one so production uncertainty becomes technology-specific. Then the monopoly can reduce the entrant's post-entry...