Econometrica: May 1985, Volume 53, Issue 3

On the Performance of Patents

https://doi.org/0012-9682(198505)53:3<567:OTPOP>2.0.CO;2-0
p. 567-586

Kenneth L. Judd

A tractable dynamic general equilibrium model of continuous product innovation is developed. Patents, or any imitation lag, of infinite duration may achieve too much, too little, or the socially optimum level of innovation. Most surprising, finite-life patents may induce undamped oscillations in innovation.
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