Template-type: ReDIF-Paper 1.0
Author-Name: Cevikarslan, Salih
Author-Email: s.cevikarslan@maastrichtuniversity.nl
Author-Workplace-Name: UNU-MERIT, and SBE, Maastricht University
Title: Optimal patent length and patent breadth in an R&D driven market with evolving 
	 consumer preferences: An evolutionary multi-agent based modelling approach
Abstract: The aims of this paper are twofold. The first is to analyse the 
	 interaction between research and development (R&D) activities of firms 
	 and heterogeneous consumer preferences in structuring the evolution of 
	 an industry. The second is to explore the effects of patent life and 
	 patent breadth on market outcomes. To answer these research questions, 
	 an evolutionary, multi-agent based, sector-level cumulative innovation 
	 model is designed. The model addresses supply and demand sides of the 
	 market simultaneously with the co-evolution of heterogeneous consumer 
	 preferences, heterogeneous firm knowledge bases and technology levels at 
	 the micro level. In line with the evolutionary modelling tradition, we 
	 have a search algorithm-innovation and imitation of products by firms - 
	 a selection of algorithm-revealed preferences of the consumers - and a 
	 population of objects in which variation is expressed and on which 
	 selection operates: namely, firms (Windrum, 2004). Firms compete on 
	 quality and price of their products in an oligopolistic market whereas 
	 consumers, constrained by their computational limits, act to maximize 
	 their utility with their product choices in a boundedly rational way. 
	 There is continuous firm entry and exit depending on the competitive 
	 performance of the firms.    
Classification-JEL: B52, L11, O34 
Keywords: Patents, industrial dynamics, evolutionary economics, agent-based modelling
Series: UNU-MERIT Working Papers
Creation-Date: 2013
Number: 2013-020
File-URL: https://unu-merit.nl/publications/wppdf/2013/wp2013-020.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2013020