Baecker Real Options and Intellectual Property

Capital Budgeting Under Imperfect Patent Protection
1. Auflage 2007
ISBN: 978-3-540-48264-2
Verlag: Springer Berlin Heidelberg
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, Band 587, 282 Seiten

Reihe: Lecture Notes in Economics and Mathematical Systems

This book proposes an integrated approach to patent risk and capital budgeting in pharmaceutical research and development (R and D), developing an option-based view (OBV) of imperfect patent protection, which draws upon contingent-claims analysis, stochastic game theory, as well as novel numerical methods. The text re-initiates a discussion about the contribution of quantitative frameworks to value-based R and D management.

Autoren/Hrsg.

Baecker, Philipp N.

Inhaltsverzeichnis

1;Preface;5
2;Contents;7
3;1 Introduction;11
3.1;1.1 Goal and Motivation;11
3.2;1.2 Method and Outline;16
4;Patenting Under Uncertainty;17
4.1;2 Patent Protection, the Firm, and the Economy;18
4.1.1;2.1 Patents as a Strategic Resource;18
4.1.2;2.2 Patents as an Incentive Mechanism;23
4.1.3;2.3 Recent Developments;25
4.2;3 Uncertainty, Irreversibility, and Flexibility;30
4.2.1;3.1 Capital Budgeting;30
4.2.2;3.2 Numerical Methods;36
4.3;4 Patent Protection in the Pharmaceutical Industry;67
4.3.1;4.1 Financial and Strategic Challenges;67
4.3.2;4.2 Risk in Pharmaceutical Patents;69
4.3.3;4.3 Implications for Capital Budgeting;73
5;Exogenous Patent Risk;79
5.1;5 Introduction and Related Work;80
5.2;6 Patents as Investment Opportunities;84
5.2.1;6.1 Static Investment Policy;84
5.2.2;6.2 Dynamic Investment Policy;86
5.3;7 Patent Risk as Jumps in the Underlying Process;121
5.3.1;7.1 Single-Stage and Single-Factor Models;121
5.3.2;7.2 Two-Stage and Two-Factor Models;148
5.4;8 From Business Shifts to Jump Processes;183
5.5;9 Preliminary Conclusion;186
6;Endogenous Patent Risk;188
6.1;10 Introduction and Related Work;189
6.2;11 Patent Risk as an Option to Litigate;191
6.2.1;11.1 Formalization;191
6.2.2;11.2 Analysis;196
6.2.3;11.3 Variations and Extensions;219
6.3;12 Preliminary Conclusion;224
6.4;13 Conclusion;226
6.4.1;13.1 Summary;226
6.4.2;13.2 Suggestions for Future Research;227
7;Appendices;228
7.1;A Proofs;229
7.1.1;A.1 Proposition 6;229
7.1.2;A.2 Proposition 11;231
7.1.3;A.3 Proposition 13;232
7.1.4;A.4 Proposition 14;234
7.2;B Numerical Methods;236
7.2.1;B.1 Binomial and Multinomial Trees;236
7.2.2;B.2 Monte Carlo Simulation;242
8;References;245
9;Index;268
10;List of Abbreviations;272
11;List of Symbols;276