A Dynamic Analysis of Licensing: The "Boomerang" Effect and Grant-Back Clauses

Jay Pil Choi ()

Working Paper Series from Institute of Economic Research, Seoul National University

Abstract: This paper develops an incomplete contract model of the licensing relationship to analyze the dynamic effects of licensing on R& D competition in the innovation market and to examine the rationale for often observed grant-back clauses. Of particular concern are how the consideration of future competition distorts the licensing relatoinship and how the "grant-back" clause cna mitigate this distortion. I also evaluate the validity of the casual antitrust argument that grant-back clauses may adversely affect competition because they reduce the licensee's incentive to engage in R&D and thereby limit rivlry in innovation markets.

New Economics Papers: this item is included in nep-mic
Date: 1999-05

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Related works:
Working Paper: A Dynamic Analysis of Licensing: The Boomerang Effect and Grant-Back Clauses (1999)
Journal Article: A Dynamic Analysis of Licensing: The "Boomerang" Effect and Grant-Back Clauses (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:snu:ioerwp:no16

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