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Optimal Licensing in a Spatial Model

Francisco Caballero-Sanz, Rafael Moner-Colonques and José Sempere-Monerris

Annals of Economics and Statistics, 2002, issue 66, 257-279

Abstract: We analyze a multi-stage non-cooperative game involving an outside patent-holder, who seeks to licence a process innovation, and two price-setting firms located on a circumference. Three licensing policies are studied: the auction, the fixed fee and the per unit output royalty. The main finding is that, contrary to standard results, royalties yield higher payoffs to the patent-holder than do an auction policy or a fixed fee policy regardless of the size of the innovation. Besides, a conflict between private and social interests arises since consumers are better off when the technology is licensed via fees.

Date: 2002
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Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Optimal licensing in a spatial model (2002)
Working Paper: Optimal Licensing in a Spatial Model (1994) Downloads
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