Optimal Two-Part Tariff Licensing Contracts with Differentiated Goods and Endogenous R&D

Ramón Faulí-Oller () and Joel Sandonis
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Ramón Faulí-Oller: Universidad de Alicante

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: In this paper we get the optimal two-part tariff contract for the licensing of a cost reducing innovation to a differentiated goods industry of a general size. We analyze the cases where the patentee is an independent laboratory or an incumbent firm. We show that, regardless of the number of firms, the degree of product differentiation and the type of patentee, the innovation is licensed to all firms. Moreover, we endogenize R&D investment and get that an internal patentee invests more (less) in R&D when the technological opportunity is low (high). In this paper we get the optimal two-part tariff contract for the licensing of a cost reducing innovation to a differentiated goods industry of a general size. We analyze the cases where the patentee is an independent laboratory or an incumbent firm. We show that, regardless of the number of firms, the degree of product differentiation and the type of patentee, the innovation is licensed to all firms. Moreover, we endogenize R&D investment and get that an internal patentee invests more (less) in R&D when the technological opportunity is low (high).

Keywords: patent licensing; two-part tariff contracts; R&D; product differentiation. (search for similar items in EconPapers)
JEL-codes: L11 L13 L14 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2008-07
New Economics Papers: this item is included in nep-com, nep-ind, nep-ino, nep-ipr, nep-pr~, nep-mic and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2008-12.pdf Fisrt version / Primera version, 2008 (application/pdf)

Related works:
Journal Article: OPTIMAL TWO-PART TARIFF LICENSING CONTRACTS WITH DIFFERENTIATED GOODS AND ENDOGENOUS R&D (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2008-12

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