Skip to main content
Article thumbnail
Location of Repository

Selection Biases in Complementary R&D Projects

By Jay Pil Choi and Heiko Gerlach

Abstract

This paper analyzes selection biases in the project choice of complementary technologies that are used in combination to produce a final product. In the presence of complementary technologies, patents allow innovating firms to hold up rivals who succeed in developing other system components. This hold-up potential induces firms to preemptively claim stakes on component property rights and excessively cluster their R&D efforts on a relatively easier technology. This selection bias is persistent and robust to several model extensions. Implications for the optimal design of intellectual property rights are discussed. We also analyze selection biases that arise when firms differ in research capabilities.R&D project choice, preemptive duplication, complementary innovations

OAI identifier:

Suggested articles


To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.