Pollock, Rufus (2006): Innovation and Imitation with and without Intellectual Property Rights.
Download (258Kb) | Preview
An 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.
|Item Type:||MPRA Paper|
|Original Title:||Innovation and Imitation with and without Intellectual Property Rights|
|Keywords:||Innovation; Imperfect Competition; Intellectual Property; Imitation|
|Subjects:||L - Industrial Organization > L5 - Regulation and Industrial Policy
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights
K - Law and Economics > K3 - Other Substantive Areas of Law
|Depositing User:||Rufus Pollock|
|Date Deposited:||24. Sep 2007|
|Last Modified:||18. Feb 2013 23:02|
A. Arundel. Patents in the knowledge-based economy. Beleidstudies Technology Economie, 37:67–88, 2001.
James Bessen. Hold-up and patent licensing of cumulative innovations with private infor- mation. Economics Letters, 82(3):321–326, 2004.
James Bessen and Eric Maskin. Sequential innovation, patents, and innovation. Na jEcon Working Paper Reviews 321307000000000021, www.na jecon.org, May 2006.
W. Cohen, R. Nelson, and P. Walsh. Protecting their intellectual assets: Appropriability conditions and why u.s. manufacturing firms patent (or not), 2000.
Victor Denicolo. Two-stage patent races and patent policy. Rand Journal of Economics, 31:488–501, 2000.
Giovanni Dosi. Sources, procedures, and microeconomic effects of innovation. Journal of Economic Literature, pages 1120–1171, 1988.
Nancy Gallini. Patent policy and costly imitation. Rand Journal of Economics, 23(1): 52–63, 1992.
Bronwyn Hall. Business method patents, innovation and policy, 5 2003.
John F. R Harter. The propensity to patent with differentiated products. Southern Economic Journal, 61(1):195–201, July 1994. ISSN 00384038.
Hugo A Hopenhayn and Matthew F Mitchell. Innovation variety and patent breadth. The RAND Journal of Economics, 32(1):152–166, 2001. ISSN 07416261.
Paul Klemperer. How broad should the scope of patent protection be? RAND Journal of Economics, 21(1):113–130, 1990.
Richard Levin, A. Klevorick, R. Nelson, S. Winter, R. Gilbert, and Z. Griliches. Appro- priating the returns from industrial research and development. Brookings Papers on Economic Activity, 3:783–831, 1987.
Edwin Mansfield. How rapidly does new industrial technology leak out? Journal of Industrial Economics, 34(2):217–223, 1985.
Peter Menell and Suzanne Scotchmer. Intellectual property, 6 2005. forthcoming, Hand- book of Law and Economics. Mitch Polinsky and Steven Shavell, eds. Amsterdam: Elsevier.
William Nordhaus. Invention, Growth and Welfare: A Theoretical Treatment of Techno- logical Change. M.I.T. Press, 1969.
Lynne M Pepall and Daniel J Richards. Innovation, imitation, and social welfare. Southern Economic Journal, 60(3):673–684, 1994. ISSN 00384038.
Rufus Pollock. Cumulative innovation, sampling and the hold-up problem. DRUID Work- ing Papers 06-29, DRUID, Copenhagen Business School, Department of Industrial Eco- nomics and Strategy/Aalborg University, Department of Business Studies, 2006.
Frederic Scherer. Nordhaus’ theory of optimal patent life: A geometric reinterpretation. American Economic Review, 62(3):422–427, 1972.
Suzanne Scotchmer and Jerry Green. Novelty and disclosure in patent law. The RAND Journal of Economics, 21(1):131–146, 1990. ISSN 07416261.
David J. Teece. Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15(6):285–305, December 1986.
Michael Waterson. The economics of product patents. American Economic Review, 80 (4):860–69, September 1990.