Imitation, patent protection and welfare

Once a new technology has been invented, there is a credible threat of imitation when patent protection is strong and imitation cost is low. Within the area of credible imitation, the innovator has an incentive to postpone technology adoption when the cost of imitation is relatively high. The possibility of licensing, however, eliminates or at least reduces the incentive for delayed technology adoption and may increase or decrease social welfare. Further, this paper explains the possibility of a forward contract on licensing.

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Year of publication:	2001-06
Authors:	Mukherjee, Arijit ; Pennings, Enrico
Institutions:	Centre for Economic Research, School of Economics and Management Studies
Subject:	Imitation \| Innovation \| Licensing \| Patent Protection \| Welfare

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Extent:	application/pdf
Series:	Keele Department of Economics Discussion Papers (1995-2001). - ISSN 1352-8955.
Type of publication:	Book / Working Paper
Notes:	This is a revised and improved version of the working paper of the authors in ECIS under the same title. We would like to thank the participants of E.A.R.I.E. conference, 2000, and particularly, Vincenzo Denicolo for helpful comments and suggestions. Arijit Mukherjee also thanks Robin Bladen-Hovell, Paul de Hek, Roger Hartley and Tim Worrall for helpful discussions and acknowledges the financial support from the Netherlands Technology Foundation (STW). Published in Volume 56, Number 4, October 2004, pp. 715-733. [ doi:10.1093/oep/gpf062 ] The text is part of a series Keele University, Department of Economics Discussion Papers Number 2001/03 25 pages
Classification:	D45 - Rationing; Licensing ; L12 - Monopoly; Monopolization Strategies ; O33 - Technological Change: Choices and Consequences; Diffusion Processes
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005181756