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Imitation, patent protection, and welfare

Author

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  • Arijit Mukherjee
  • Enrico Pennings

Abstract

Newly developed technologies run the risk of being imitated when patents are long and imitation cost is low. This paper shows that the innovator has the incentive to postpone technology adoption when imitation is a credible threat but imitation cost is not below a certain threshold. The possibility of licensing eliminates or at least reduces the incentive for delayed technology adoption. Further, this paper explains the advantages of a forward licensing contract versus a simple licensing contract in terms of profits and social welfare. Copyright 2004, Oxford University Press.

Suggested Citation

  • Arijit Mukherjee & Enrico Pennings, 2004. "Imitation, patent protection, and welfare," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 715-733, October.
  • Handle: RePEc:oup:oxecpp:v:56:y:2004:i:4:p:715-733
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    File URL: http://hdl.handle.net/10.1093/oep/gpf062
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    Citations

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    Cited by:

    1. Leonard F.S. Wang & Arijit Mukherjee, 2014. "Patent Protection, Innovation and Technology Licensing," Australian Economic Papers, Wiley Blackwell, vol. 53(3-4), pages 245-254, December.
    2. Billette de Villemeur, Etienne & Ruble, Richard & Versaevel, Bruno, 2014. "Innovation and imitation incentives in dynamic duopoly," MPRA Paper 59453, University Library of Munich, Germany.
    3. Debasmita Basak & Andreas Hoefele & Arijit Mukherjee, 2014. "Union Bargaining Power and Product Innovation: Relevance of the Preference Function," CESifo Working Paper Series 5007, CESifo Group Munich.
    4. repec:bla:jindec:v:65:y:2017:i:1:p:220-234 is not listed on IDEAS
    5. Arijit Mukherjee, 2013. "Patent pool under endogenous technology choice," Discussion Paper Series 2013_07, Department of Economics, Loughborough University, revised Jul 2013.
    6. Mukherjee, Arijit, 2006. "Patents and R&D with imitation and licensing," Economics Letters, Elsevier, vol. 93(2), pages 196-201, November.
    7. Siddhartha Bandyopadhyay & Arijit Mukherjee, 2014. "R&D Cooperation with Entry," Manchester School, University of Manchester, vol. 82(1), pages 52-70, January.
    8. Arijit Mukherjee, 2013. "Patent protection under endogenous product differentiation," Discussion Paper Series 2013_06, Department of Economics, Loughborough University, revised Jul 2013.
    9. 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.
    10. Billette de Villemeur, Etienne & Ruble, Richard & Versaevel, Bruno, 2015. "On the timing of innovation and imitation," MPRA Paper 69161, University Library of Munich, Germany.
    11. Mukherjee, Arijit & Pennings, Enrico, 2011. "Unionization structure, licensing and innovation," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 232-241, March.
    12. Arijit Mukherjee & Prabal Roy chowdhury, 2013. "Innovation and social desirability of merger," Economics Bulletin, AccessEcon, vol. 33(1), pages 348-360.
    13. Debasmita Basak & Arijit Mukherjee, "undated". "Unionisation structure and product innovation," Discussion Papers 11/12, University of Nottingham, School of Economics.
    14. Arijit Mukherjee & Achintya Ray, 2014. "Entry, Profit and Welfare under Asymmetric R&D Costs," Manchester School, University of Manchester, vol. 82(3), pages 284-295, June.
    15. Billette de Villemeur, Etienne & Ruble, Richard & Versaevel, Bruno, 2016. "When should a winner take all, or pay some? Innovation and imitation incentives in a dynamic duopoly," MPRA Paper 75465, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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