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The impact of piracy on innovation in the presence of technological and market uncertainty

  • Banerjee, Dyuti
  • Chatterjee, Ishita

With a single innovating firm facing only technological uncertainty, piracy unambiguously retards innovation. However, with R&D competition where firms face both market and technological uncertainties, we show that if the two firms differ "significantly" with respect to the efficiency in R&D investment, then piracy increases the R&D investment of the less efficient firm and reduces that of the more efficient firm. In this case piracy enhances the overall probability of a successful innovation.

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Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 22 (2010)
Issue (Month): 4 (December)
Pages: 391-397

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Handle: RePEc:eee:iepoli:v:22:y:2010:i:4:p:391-397
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505549

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