| By: |
Kamal Saggi (Vanderbilt University) |
| Abstract: |
This paper analyzes the causes and consequences of regional exhaustion of
intellectual property, a policy regime under which a set of countries permit
parallel imports from one another but not from the rest of the world. A
three-country model is developed in which two high-income countries jointly
choose their common exhaustion policy among national (NE), international (IE),
or regional exhaustion (RE). The key result is that the two high-income
countries choose to implement RE when they are relatively similar to each
other and sufficiently high-income relative to the third country. We also
consider a scenario where the policy choice set is restricted to
non-discriminatory exhaustion regimes (i.e. NE or IE). Comparing the policy
outcome of this constrained scenario with that of the core model, we show that
the option to choose RE makes all countries better off. |
| Keywords: |
Regional Exhaustion of IPRs, National Exhaustion, International Exhaustion, Parallel imports, Market power, Welfare |
| JEL: |
F1 |
| Date: |
2013–07–14 |
| URL: |
http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-13-00011&r=ipr |