In active investment climates where firms sequentially improve each other's products, a patent can terminate either because it expires or because a non-infringing innovation displaces its product in the market. We define the length of time until one of these happens as the effective patent life,...

Patents differ from other forms of intellectual property in that independent invention is not a defence to infringement. We argue that the patent rule is inferior in any industry where the cost of independently inventing a product is not too much less than (no less than half) the inventor's...

A partnership is a coalition that divides its output equally. The authors show that when partnerships can form freely, a stable or "core" pa rtition into partnerships always exists and is generically unique. Wh en people differ in ability, the equal-sharing constraint inefficient ly limits the...