Template-Type: ReDIF-Paper 1.0
Author-Name: Debi Prasad Mohapatra
Author-X-Name-First: Debi
Author-X-Name-Last: Prasad Mohapatra
Author-Name: Vatsala Shreeti
Author-X-Name-First: Vatsala
Author-X-Name-Last: Shreeti
Title: Imitation and the diffusion of innovation
Abstract: Why would a market leader choose not to patent an innovation? We study Samsung's decision to forgo patent protection for dual SIM technology in the Indian mobile handset market. Using a structural model of demand and supply estimated on quarterly product-level data from the Indian mobile handset industry, we document that rival firms' dual SIM products generated a preference discovery externality. Rival firms' widespread adoption of the dual SIM technology allowed consumers to discover the value of the technology, also benefiting Samsung itself. Counterfactual simulations show that a patent would have suppressed this externality, reducing Samsung's equilibrium profits despite holding monopoly rights. Voluntary non-patenting was therefore privately optimal. Our findings shed light on wider debates about open-sourcing in software and other markets.
Creation-Date: 2026-04
File-URL: https://www.bis.org/publ/work1344.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1344.htm
File-Format: text/html
Number: 1344
Keywords: innovation, patenting, telecom, preference discovery
Classification-JEL: L13, O33, O34, L63
Handle: RePEc:bis:biswps:1344