Innovation and Imitation with and without Intellectual Property Rights

Pollock, Rufus (2006): Innovation and Imitation with and without Intellectual Property Rights.

Abstract

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
• Institution: Cambridge University
• Language: English
• Keywords: Innovation; Imperfect Competition; Intellectual Property; Imitation
• Subjects: L - Industrial Organization > L5 - Regulation and Industrial Policy; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; K - Law and Economics > K3 - Other Substantive Areas of Law

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