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Innovation, Imitation and Competition

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  • Wen Zhou

    (University of Hong Kong)

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    Abstract

    In a general equilibrium framework, it is known that imitation may actually promote innovation (Aghion et al., 1997). The same effect is demonstrated with a standard oligopoly model in which one firm has the ability to develop technologies while all other firms imitate and obtain a fraction of it for free. Competition is shown to dampen innovation, while imitation may stimulate it if imitation is strong and competition moderate. The findings have implications for policy toward intellectual property rights protection, as weak protection may promote rather than impede technology innovation.

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    File URL: http://www.bepress.com/cgi/viewcontent.cgi?article=2256&context=bejeap
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    Bibliographic Info

    Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

    Volume (Year): 9 (2009)
    Issue (Month): 1 ()
    Pages: 27

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    Handle: RePEc:bpj:bejeap:v:9:y:2009:i:1:n:27

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    Web page: http://www.degruyter.com

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    Web: http://www.degruyter.com/view/j/bejeap

    Related research

    Keywords: innovation; imitation; competition; intellectual property protection;

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    Cited by:
    1. Junichiro Ishida & Toshihiro Matsumura & Noriaki Matsushima, 2010. "Market Competition, R&D and Firm Profits in Asymmetric Oligopoly," ISER Discussion Paper 0777, Institute of Social and Economic Research, Osaka University.

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