Essays on Intellectual Property Bargaining and Trade

In this dissertation, I present three essays on the dynamics of intellectual property bargaining and trade, particularly of patents. The first essay presents a game theoretic model examining the sale of intellectual property rights from small inventors with buyers of varying commercialization capacity across intellectual property rights regimes with full and no property rights protection. The essay finds that in Nash equilibrium in both single seller and infinite seller scenarios, sellers generally approach firms with greater commercialization capabilities if property rights are strong, and approach firms with lesser commercialization capabilities if property rights are not protected. The second essay examines the sale of patents from small inventors and entities to firms from 1992 to 2000. I exploit the 1996 Supreme Court case Markman v. Westview Instruments, arguing that patent protection weakened afterwards, to compare patent sales to firms with greater or weaker commercialization capabilities, which I proxy using industrial patent holdings. Using a conditional fixed-effects multivariate choice model, I find that patent sales are more highly concentrated towards firms with weaker patent holdings after Markman. The last essay develops a conceptual model of patent dynamic capabilities for firms, developing several predictions in conjunction with the technology life-cycle model.