Innovation and Imitation with and without Intellectual Property Rights
AbstractAn extensive empirical literature indicates that returns from innovation are appropriated primarily via mechanisms other than formal intellectual property rights -- and that `imitation' is itself a costly activity. However most theory assumes the pure nonrivalry of `ideas' with its implication that, in the absence of intellectual property, innovation (and welfare) is zero. This paper introduces a formal model of innovation based on imperfect competition in which imitation is costly and an innovator has a first-mover advantage. Without intellectual property, a significant amount of innovation still occurs and welfare may actually be higher than with intellectual property.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 5025.
Date of creation: Sep 2006
Date of revision: 17 Jul 2007
Innovation; Imperfect Competition; Intellectual Property; Imitation;
Find related papers by JEL classification:
- L5 - Industrial Organization - - Regulation and Industrial Policy
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- K3 - Law and Economics - - Other Substantive Areas of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-30 (All new papers)
- NEP-COM-2007-09-30 (Industrial Competition)
- NEP-INO-2007-09-30 (Innovation)
- NEP-IPR-2007-09-30 (Intellectual Property Rights)
- NEP-LAW-2007-09-30 (Law & Economics)
- NEP-MIC-2007-09-30 (Microeconomics)
- NEP-TID-2007-09-30 (Technology & Industrial Dynamics)
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