Real Options and Intellectual Property
Capital Budgeting Under Imperfect Patent Protection
Over the last years, due to intensive competition in the knowledge economy, legal aspects surrounding intellectual property (IP) rights - including litigation and settlement - have continuously gained in importance. Correspondingly, professional IP management has become an indispensable element of successful value-based management (VBM) in research-intensive firms.
With this text, the author 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. Bridging a widening gap between recent advances in the theory of financial analysis and current challenges faced by pharmaceutical companies, the text re-initiates a discussion about the contribution of quantitative frameworks to value-based R and D management.
With this text, the author 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. Bridging a widening gap between recent advances in the theory of financial analysis and current challenges faced by pharmaceutical companies, the text re-initiates a discussion about the contribution of quantitative frameworks to value-based R and D management.
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
Baecker, Philipp N.
| ISBN | 9783540482642 |
|---|---|
| Artikelnummer | 9783540482642 |
| Medientyp | E-Book - PDF |
| Auflage | 2. Aufl. |
| Copyrightjahr | 2007 |
| Verlag | Springer-Verlag |
| Umfang | 282 Seiten |
| Sprache | Englisch |
| Kopierschutz | Digitales Wasserzeichen |
