Endogenous Protection of R&D Investments

We examine firms' incentives to protect their non-cooperative R&D investments from spilling over to competitors. Contrary to most of the existing literature, we show that the lack of full appropriability can lead to an increase in R&D investments. We also show that even if protection is costless, firms sometimes choose to let their R&D investments unprotected. Our welfare analysis indicates that public policies that promote the dissemination of technological knowledge should be adopted