This paper analyzes the causes and consequences of regional exhaustion of intellectual property, a discriminatory policy 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 two high-income countries implement RE when they are similar to each other and sufficiently high-income relative to the third country. Restricting their choice set to only non-discriminatory exhaustion policies (i.e., NE and IE) makes all countries worse off."> This paper analyzes the causes and consequences of regional exhaustion of intellectual property, a discriminatory policy 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 two high-income countries implement RE when they are similar to each other and sufficiently high-income relative to the third country. Restricting their choice set to only non-discriminatory exhaustion policies (i.e., NE and IE) makes all countries worse off."> This paper analyzes the causes and consequences of regional exhaustion of intellectual property, a discriminatory policy under which a set of countries ">
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Regional exhaustion of intellectual property

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  • Kamal Saggi
Abstract
type="main" xml:lang="en"> This paper analyzes the causes and consequences of regional exhaustion of intellectual property, a discriminatory policy 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 two high-income countries implement RE when they are similar to each other and sufficiently high-income relative to the third country. Restricting their choice set to only non-discriminatory exhaustion policies (i.e., NE and IE) makes all countries worse off.

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  • Kamal Saggi, 2014. "Regional exhaustion of intellectual property," International Journal of Economic Theory, The International Society for Economic Theory, vol. 10(1), pages 125-137, March.
    • Handle: RePEc:bla:ijethy:v:10:y:2014:i:1:p:125-137
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    1. Malueg, David A. & Schwartz, Marius, 1994. "Parallel imports, demand dispersion, and international price discrimination," Journal of International Economics, Elsevier, vol. 37(3-4), pages 167-195, November.
    2. Tommaso M. Valletti & Stefan Szymanski, 2006. "Parallel Trade, International Exhaustion And Intellectual Property Rights: A Welfare Analysis," Journal of Industrial Economics, Wiley Blackwell, vol. 54(4), pages 499-526, December.
    3. Martin Richardson, 2017. "An Elementary Proposition Concerning Parallel Imports," World Scientific Book Chapters, in: Dimensions of Trade Policy, chapter 14, pages 285-299, World Scientific Publishing Co. Pte. Ltd..
    4. Gene M. Grossman & Edwin L.‐C. Lai, 2008. "Parallel imports and price controls," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 378-402, June.
    5. Wilfred J. Ethier, 1998. "Regionalism in a Multilateral World," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1214-1245, December.
    6. Keith E. Maskus, 2000. "Parallel Imports," The World Economy, Wiley Blackwell, vol. 23(9), pages 1269-1284, September.
    7. Valletti, Tommaso M., 2006. "Differential pricing, parallel trade, and the incentive to invest," Journal of International Economics, Elsevier, vol. 70(1), pages 314-324, September.
    8. Pinelopi Koujianou Goldberg, 2010. "Alfred Marshall Lecture Intellectual Property Rights Protection in Developing Countries: The Case of Pharmaceuticals," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 326-353, 04-05.
    9. Pecorino, Paul, 2002. "Should the US allow prescription drug reimports from Canada?," Journal of Health Economics, Elsevier, vol. 21(4), pages 699-708, July.
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    Cited by:

    1. Kamal Saggi, 2016. "Trade, Intellectual Property Rights, and the World Trade Organization," Vanderbilt University Department of Economics Working Papers 16-00014, Vanderbilt University Department of Economics.
    2. Olena Ivus & Edwin L.‐C. Lai & Ted Sichelman, 2020. "An economic model of patent exhaustion," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(4), pages 816-833, October.

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