A Cross-Licensing System Discourages R&D Investments In Completely Complementary Technologies

Makoto Okamura, Tetsuya Shinkai (shinkai.emeritus@kwansei.ac.jp) and Satoru Tanaka
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Makoto Okamura: Hiroshima University
Satoru Tanaka: Kobe City University of Foreign Studies

No 27, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: We consider the research and development (R&D) investment com petition of duopolistic firms in completely complementary technologies. By "completely complementary technologies," we mean that no firm can produce the goods without both of the technologies. We derive the investments competition equilibria in R&D of the two completely complementary technologies with and without a cross-licensing system. By comparing R&D investment levels in the two equilibria, we show that the cross-licensing system discourages the R&D invest ments when the duopolistic firms produce goods by using the two completely complementary technologies.

Keywords: completely complementary technologies; cross-licensing system; R&D investments (search for similar items in EconPapers)
JEL-codes: D45 L13 O32 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2005-09, Revised 2005-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:27

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