A BEJEAP Topics article.

Abstract

In a general equilibrium framework, it is known that imitation may actually promote innovation (Aghion et al., 1997). The same effect is demonstrated with a standard oligopoly model in which one firm has the ability to develop technologies while all other firms imitate and obtain a fraction of it for free. Competition is shown to dampen innovation, while imitation may stimulate it if imitation is strong and competition moderate. The findings have implications for policy toward intellectual property rights protection, as weak protection may promote rather than impede technology innovation.

Submitted: March 17, 2009 · Accepted: July 2, 2009 · Published: July 10, 2009

Recommended Citation

Zhou, Wen (2009) "Innovation, Imitation and Competition," The B.E. Journal of Economic Analysis & Policy: Vol. 9 : Iss. 1 (Topics), Article 27.
DOI: 10.2202/1935-1682.2256
Available at: http://www.bepress.com/bejeap/vol9/iss1/art27