Cutting too Close? Design Protection and Innovation in Fashion Goods
AbstractContinued lobbying by high-end, American designers for intellectual property-type fashion design protection has culminated in the proposed Innovative Design Protection and Piracy Prevention Act, intended to introduce EU standards. Using a sequential, 2-firm, vertical differentiation framework, we analyze the effects of protection on investment in innovative designs by high-quality (‘designer’) and lower-quality (‘mass-market’) firms when the mass-marketer may opt to imitate, consumers prefer trendsetting designs and firms compete in prices. We show that design protection, by transforming mass-marketers from imitators to innovators, may reduce both designer profits and welfare. The model provides possible explanations for the dearth of EU case law and the increase in designer/mass-marketer collaborations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3716.
Date of creation: 2012
Date of revision:
intellectual property rights; fashion design protection; imitation; licensing;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- GRILO, Isabel & SHY, Oz & THISSE, Jacques-François, 1997.
"Price competition when consumer behavior is characterized by conformity or vanity,"
CORE Discussion Papers
1997032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Grilo, Isabel & Shy, Oz & Thisse, Jacques-Francois, 2001. "Price competition when consumer behavior is characterized by conformity or vanity," Journal of Public Economics, Elsevier, vol. 80(3), pages 385-408, June.
- GRILO, Isabel & SHY, Oz & THISSE, Jacques-François, . "Price competition when consumer behavior is characterized by conformity or vanity," CORE Discussion Papers RP -1518, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-73, June.
- Boone, Jan & Shapiro, Joel, 2006.
"Selling to Consumers with Endogenous Types,"
CEPR Discussion Papers
5862, C.E.P.R. Discussion Papers.
- Jan Boone & Joel Shapiro, 2006. "Selling to consumers with endogenous types," Economics Working Papers 992, Department of Economics and Business, Universitat Pompeu Fabra.
- Boone, J. & Shapiro, J., 2006. "Selling to Consumers with Endogenous Types," Discussion Paper 2006-74, Tilburg University, Center for Economic Research.
- Boone, J. & Shapiro, J., 2006. "Selling to Consumers with Endogenous Types," Discussion Paper 2006-021, Tilburg University, Tilburg Law and Economic Center.
- Bourreau, Marc & Dogan, PInar, 2010.
"Cooperation in product development and process R&D between competitors,"
International Journal of Industrial Organization,
Elsevier, vol. 28(2), pages 176-190, March.
- Bourreau, Marc & Dogan, Pinar, 2010. "Cooperation in Product Development and Process R&D Between Competitors," Scholarly Articles 4863170, Harvard Kennedy School of Government.
- Bourreau, Marc & Dogan, Pinar, 2007. "Cooperation in Product Development and Process R&D Between Competitors," Working Paper Series rwp07-056, Harvard University, John F. Kennedy School of Government.
- M. Bourreau & P. Dogan, . "Cooperation in Product Development and Process R&D Between Competitors," Working Paper 33645, Harvard University OpenScholar.
- Luca LAMBERTINI & Raimondello ORSINI, 2005.
"Positional effects, product quality and regulation in duopoly,"
Discussion Papers (REL - Recherches Economiques de Louvain)
2005041, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Luca Lambertini & Raimondello Orsini, 2005. "Positional effects, product quality and regulation in duopoly," Recherches économiques de Louvain, De Boeck Université, vol. 71(4), pages 367-381.
- Cowan, R. & Cowan, W. & Swann, P., 1996.
"A Model of Demand with Interactions Among Consumers,"
UWO Department of Economics Working Papers
9609, University of Western Ontario, Department of Economics.
- Cowan, Robin & Cowan, William & Swann, Peter, 1997. "A model of demand with interactions among consumers," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 711-732, October.
- Veblen, Thorstein, 1899. "The Theory of the Leisure Class," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1899.
- Wolfgang Pesendorfer, 1993.
"Design Innovation and Fashion Cycles,"
1049, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Anette Boom & Pio Baake, .
"Vertical Product Differentiation, Network Externalities, and Compatibility Decisions,"
010, Departmental Working Papers.
- Baake, Pio & Boom, Anette, 2001. "Vertical product differentiation, network externalities, and compatibility decisions," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 267-284, January.
- Comino, Stefano & Manenti, Fabio M. & Nicolò, Antonio, 2011. "Ex-ante licensing in sequential innovations," Games and Economic Behavior, Elsevier, vol. 73(2), pages 388-401.
- Caulkins, J.P. & Hartl, R.F. & Kort, P.M. & Feichtinger, G., 2007.
"Explaining fashion cycles: Imitators chasing innovators in product space,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-194289, Tilburg University.
- Caulkins, Jonathan P. & Hartl, Richard F. & Kort, Peter M. & Feichtinger, Gustav, 2007. "Explaining fashion cycles: Imitators chasing innovators in product space," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1535-1556, May.
- Jonathan M. Barnett & Gilles Grolleau & Sana El Harbi, 2010. "The Fashion Lottery: Cooperative Innovation in Stochastic Markets," The Journal of Legal Studies, University of Chicago Press, vol. 39(1), pages 159-200, 01.
- Ghazzai Hend & Lahmandi-Ayed Rim, 2009. "Vertical Differentiation, Social Networks and Compatibility Decisions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-23, June.
- Insaf Bekir & Sana El Harbi & Gilles Grolleau, 2012. "The strategy of raising counterfeiters’ costs in luxury markets," European Journal of Law and Economics, Springer, vol. 33(3), pages 645-661, June.
- Corneo, Giacomo & Jeanne, Olivier, 1997. "Conspicuous consumption, snobbism and conformism," Journal of Public Economics, Elsevier, vol. 66(1), pages 55-71, October.
- Takeyama, Lisa N, 1994. "The Welfare Implications of Unauthorized Reproduction of Intellectual Property in the Presence of Demand Network Externalities," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 155-66, June.
- Coelho, Philip R P & McClure, James E, 1993. "Toward an Economic Theory of Fashion," Economic Inquiry, Western Economic Association International, vol. 31(4), pages 595-608, October.
- Andrea Di Liddo & Steffen Jrgensen, 2006. "Design Imitation in the Fashion Industry," Quaderni DSEMS 06-2006, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
- Lambertini, Luca & Orsini, Raimondello, 2002. "Vertically Differentiated Monopoly with a Positional Good," Australian Economic Papers, Wiley Blackwell, vol. 41(2), pages 151-63, June.
- Frijters, Paul, 1998. "A model of fashions and status," Economic Modelling, Elsevier, vol. 15(4), pages 501-517, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.