Economics

Volume 1, Issue 1, December 2012

  • Innovation and imitation in a vertically differentiated model—R&D costs as a prerequisite to patentability

    Chien-Chieh Huang, Wei-Wei Lee, I-Huei Lee

    Issue: Volume 1, Issue 1, December 2012
    Pages: 1-11
    Received: 07 December 2012
    Accepted:
    Published: 30 December 2012
    DOI: 10.11648/j.eco.20120101.11
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    Abstract: By incorporating an increasing R&D cost function into a vertically differentiated model, we investigate the optimal behaviors of an innovator and an imitator as well as the effectiveness of patent protections with varied R&D costs. The results show that the imitator enjoys the second-mover advantage and the high-quality advantage in a free market. ... Show More