a model with endogenous number of innovatingfirms, we show that whether product patent increases R&D is ambiguous, and … depends onthe type of market demand and the cost of R&D. If the market size increases with numberof firms, product patent … of lower R&D under productpatent. If the market size does not increase with number of firms, product patent …

We show that if patent protection and trade secrecy generate asymmetricmarket structure, an innovator may prefer patent …