How to license a transport innovation

John Heywood and Zheng Wang

The Annals of Regional Science, 2015, vol. 55, issue 2, 485-500

Abstract: This paper identifies the optimal method to license an innovation that reduces transport cost in a duopoly model of spatial price discrimination. An inside innovator finds licensing by a distance fee more profitable than by a fixed fee, an ad valorem royalty or a per unit royalty. Moreover, the social welfare associated with distance fee licensing is larger than that associated with not licensing. In contrast, an outside innovator never finds licensing by a distance fee the most profitable choice. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: L13; R30 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00168-015-0710-0

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