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Patent protection under endogenous product differentiation

Mukherjee, Arijit


Professor of Industrial Economics


It is generally believed that, if weak patent protection does not affect innovation, it makes consumers and society better off compared to strong patent protection by increasing the intensity of competition. We show that this conclusion may not be valid if the innovator can take other non-production strategies, such as product differentiation, which helps to reduce the intensity of competition. Weak patent protection may reduce consumer surplus and social welfare by inducing product differentiation. We show that the type of product-market competition and the market demand function play important roles in this respect. Hence, there can be an argument for strong patent protection even if it does not affect innovation.


Mukherjee, A. (2014). Patent protection under endogenous product differentiation. Asia-Pacific Journal of Accounting and Economics, 21(1), 78-93. doi:10.1080/16081625.2014.858389

Journal Article Type Article
Acceptance Date Oct 17, 2013
Online Publication Date Dec 3, 2013
Publication Date Jan 2, 2014
Deposit Date Dec 10, 2018
Journal Asia-Pacific Journal of Accounting & Economics
Print ISSN 1608-1625
Electronic ISSN 2164-2257
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 21
Issue 1
Pages 78-93
Keywords patent protection; product differentiation; welfare
Public URL
Publisher URL