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Imitation, patent protection and welfare


Author Info

  • Arijit Mukherjee

    (Department of Economics, Keele University, Keele,)

  • Enrico Pennings

    (Universitat Pompeu Fabra, Spain)


Once a new technology has been invented, there is a credible threat of imitation when patent protection is strong and imitation cost is low. Within the area of credible imitation, the innovator has an incentive to postpone technology adoption when the cost of imitation is relatively high. The possibility of licensing, however, eliminates or at least reduces the incentive for delayed technology adoption and may increase or decrease social welfare. Further, this paper explains the possibility of a forward contract on licensing.

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Bibliographic Info

Paper provided by Department of Economics, Keele University in its series Keele Department of Economics Discussion Papers (1995-2001) with number 2001/03.

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Length: 25 pages
Date of creation: Jun 2001
Date of revision:
Publication status: Published in Volume 56, Number 4, October 2004, pp. 715-733. [ doi:10.1093/oep/gpf062 ]
Handle: RePEc:kee:keeldp:2001/03

Note: This is a revised and improved version of the working paper of the authors in ECIS under the same title. We would like to thank the participants of E.A.R.I.E. conference, 2000, and particularly, Vincenzo Denicolo for helpful comments and suggestions. Arijit Mukherjee also thanks Robin Bladen-Hovell, Paul de Hek, Roger Hartley and Tim Worrall for helpful discussions and acknowledges the financial support from the Netherlands Technology Foundation (STW).
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Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
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Postal: Department of Economics, Keele University, Keele, Staffordshire ST5 5BG - United Kingdom

Related research

Keywords: Imitation; Innovation; Licensing; Patent Protection; Welfare;

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References listed on IDEAS
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  1. Caniëls,Marjolein & Verspagen,Bart, 1999. "Spatial distance in a technology gap model," Research Memorandum 021, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  2. Caniels, Marjolelein & Verspagen, Bart, 1999. "The Effects of economic integration on regional growth, an evolutionary model," ERSA conference papers ersa99pa219, European Regional Science Association.
  3. Lint, O. & Pennings, E., 2000. "The recently chosen digital video standard: playing the game within the game," Eindhoven Center for Innovation Studies (ECIS) working paper series 00.02, Eindhoven Center for Innovation Studies (ECIS).
  4. Duysters, G. & Hagedoorn, J., 2000. "The effect of mergers and acquisitions on the technological performance of companies in a high-tech environment," Eindhoven Center for Innovation Studies (ECIS) working paper series 00.04, Eindhoven Center for Innovation Studies (ECIS).
  5. Bongenaar, B. & Szirmai, A., 1999. "The Role of a Research and Development Institute in the Development and Diffusion of Technology," Working Papers 99.9, Eindhoven Center for Innovation Studies.
  6. Jan Fagerberg & Bart Verspagen, 1999. "Productivity, R&D Spillovers and Trade," Working Papers 3, Centre for Technology, Innovation and Culture, University of Oslo.
  7. Mukherjee, Arijit & Balasubramanian, N., 2001. "Technology transfer in a horizontally differentiated product market," Research in Economics, Elsevier, vol. 55(3), pages 257-274, September.
  8. Lint, O. & Pennings, E., 2000. "The recently chosen digital video standard: playing the game within the game," Working Papers 00.02, Eindhoven Center for Innovation Studies.
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Cited by:
  1. Arijit Mukherjee & Enrico Pennings, 2005. "Unionization Structure, Licensing and Innovation," Tinbergen Institute Discussion Papers 05-109/4, Tinbergen Institute.
  2. Bagchi, Aniruddha & Roy, Abhra, 2011. "Endogenous R&D and Intellectual Property Laws in Developed and Emerging Economies," MPRA Paper 31822, University Library of Munich, Germany.
  3. Arijit Mukherjee, 2013. "Patent protection under endogenous product differentiation," Discussion Paper Series 2013_06, Department of Economics, Loughborough University, revised Jul 2013.
  4. Arijit Mukherjee, 2013. "Patent pool under endogenous technology choice," Discussion Paper Series 2013_07, Department of Economics, Loughborough University, revised Jul 2013.
  5. Debasmita Basak & Arijit Mukherjee, . "Unionisation structure and product innovation," Discussion Papers 11/12, University of Nottingham, School of Economics.
  6. Yoon, Young-Ro, 2009. "Endogenous timing of actions under conflict between two types of second mover advantage," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 728-738, November.
  7. Arijit Mukherjee & Prabal Roy chowdhury, 2013. "Innovation and social desirability of merger," Economics Bulletin, AccessEcon, vol. 33(1), pages 348-360.


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