Evaluating Strategies to Shift Bargaining Power
A developing country is negotiating with a pharmaceutical company for access to a patented, life-saving drug. The company is demanding a price that the country cannot afford. The country's government is considering two policy proposals to increase its bargaining power:
Proposal A: Pass a law that changes the 'rules of the game' by allowing the government to issue a 'compulsory license'. This would permit local firms to produce a generic version of the drug for domestic use, even though the patent is still active.
Proposal B: Fund a long-term research initiative to develop a completely new, alternative drug for the same disease.
Evaluate which of these two proposals would be more effective at increasing the country's bargaining power in the short term. Justify your evaluation by explaining how each proposal influences the underlying determinants of power in this economic interaction.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
Evaluation in Bloom's Taxonomy
Cognitive Psychology
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