a Theoretical and Positive Study on Pro-Patent Policy and Competition Policy of Economic Performance in Information Technologies

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In this study, we consider the R&D investment competition of the two duopolistic firms in both weakly complementary technologies economy and completely complementary technologies. In the former economy, we assume that each firm can produce goods without both of the two technologies but it incurs more redundant costs than that in the case each or both of the technologies may be available for it. By the latter economy, we assume that no firm can produce the goods without both of the technologies. For these two cases, we derive the investments competition equilibria in R&D of the two technologies with and without the (cross-) licensing system. By comparing of the R&D investment levels in the two equilibria, we show that the (cross-) licensing system discourages the R&D investments when the duopolistic firms can produce goods by using of the two weakly (completely) complementary technologies. Furthermore, we consider the R&D investments competition game of the two duopolistic firms which independently invest in the new integrated technology of the two existing complementary technologies to produce the good. Each firm has the patent of one of the two old technologies. If each firm produces the product and supplies it without license contract held by another firm, it incurs the compensation for damages in either by use of the new integrated technology developed by it or the existing technology patented by its rival. We show the existence of symmetric Nash equilibria in the game. We also present a necessary and sufficient condition for local stability of the symmetric equilibria.