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Preemptive Patenting and the Persistence of Monopoly

Richard J. Gilbert; David Newbery

This article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power. The results apply to other situations such as brand identification, spatial location, and capacity expansion, which share the characteristic that early, or preemptive, actions may lower the returns to potential competitors.

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