We study an infinite-horizon cumulative innovation model, in which patents are characterized bytheir length and the likelihood of being ruled valid in a patent infringement litigation. Strengtheningpatent protection via a greater validity or length has two opposing effects on innovation: 1)...

We present a model of process innovation that offers an explanation for the negative relationship between patent strength and R&D investment. We show that under the popularly used damage rule of reasonable royalties, the innovator might favor imitation. Since imitation is discouraged for strong...

We model an employee's decision to pursue an innovative idea at his employing firm (internally) or as a start-up (externally). We characterize an idea by its market profitability and the degree of positive/negative externality that it imposes on the employing firm's profits. The innovation...

This work analyzes the impact of regulation policies in two distinct settings. Chapter 1 provides an overview of the existing theoretical literature on innovation and entrepreneurship. It summarizes some of the main findings of the effect of various means of protecting intellectual property on...