On the Sustainability of Technology Licensing Under Asymmetric Information Game

Chien-Shu Tsai, Ting-Chung Tsai, Po-Sheng Ko, Chien-Hui Lee, Jen-Yao Lee and Yu-Lin Wang
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Chien-Shu Tsai: Department of Tourism Management, Kao Yuan University, Kaohsiung 82151, Taiwan
Ting-Chung Tsai: Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82444, Taiwan
Po-Sheng Ko: Department of Public Finance and Taxation, National Kaohsiung University of Science and Technology, Kaohsiung 82444, Taiwan
Chien-Hui Lee: Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82444, Taiwan
Jen-Yao Lee: Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82444, Taiwan
Yu-Lin Wang: Department of Economics, National Chung Cheng University, Minxiong Township, Chiayi County 62102, Taiwan

Sustainability, 2019, vol. 11, issue 24, 1-15

Abstract: Past research indicates that a licensor tends to adopt the fixed fee, in order to obtain higher profit rather than secure royalty when he participates in zero production in the market. This study instead finds that the patentee’s optimum strategy may vary. In addition to the fixed-fee strategy, royalty or mixed licensing, or fixed fee plus royalty may be potential choices for the patentee as well which is depend on the market scale, incidence of market scale, and magnitude of cost-saving. The patentee may choose to only authorize a type of high market size based on self-interested motives. The technology licensing market is not sustainable.

Keywords: technology licensing; asymmetric information; patent (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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