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Innovation, Imitation, and Intellectual Property Rights
Author(s) -
Elhanan Helpman
Publication year - 1992
Language(s) - English
Resource type - Reports
DOI - 10.3386/w4081
Subject(s) - imitation , intellectual property , law and economics , property (philosophy) , economics , business , mathematical economics , political science , law , psychology , social psychology , epistemology , philosophy
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.

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