Patent rights in a duopoly with price leadership

Abstract This study analyzes the impact of patent rights on duopolistic competition with price leadership. The willingness of companies with significant patent rights to form a cartel was assessed. The main aim of the analysis was to determine the role of patents in maintaining the stability of the cartel. It has been shown that the existence of patent rights eliminates the prisoner’s dilemma and strengthens cartel agreements. This leads to the conclusion that patent rights may significantly limit competition between enterprises and therefore should be within the scope of interest of antitrust offices.