| This paper develops a model of heterogeneous producers to examine the economic causes of IPR infringement and its consequences for the welfare of the interest groups and the pricing and adoption of a new technology (i.e., a genetically modified seed) in the context of a small open developing economy. Enforcement of IPRs, and pricing and adoption of the new technology are modeled as a sequential game between the government that enforces the IPRs, a foreign innovating firm that prices the new technology, and the developing country’s producers who make the production and cheating decisions. Analytical results show that complete deterrence of IPR infringement is not always economically optimal. IPR infringement affects the welfare of the interest groups and... |
