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Innovation, Imitation and Open Source
by Pollock, Rufus
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Abstract
An extensive empirical literature indicates that, even without formal intellectual property rights, innovators enjoy a variety of first-mover advantages and that ‘imitation’ is itself a costly activity. There is also accumulating evidence that an ‘open’ approach to knowledge production can deliver substantial efficiency advantages. This article introduces a formal framework incorporating all of these factors. We examine the relative performance of an ‘open’ versus a ‘closed’ (proprietary) regime, and explicitly characterize the circumstances in which an open approach, despite its effect on facilitating imitation, results in a higher level of innovation.
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