Screening for Good Patent Pools through Price Caps on Individual Licenses

Aleksandra Boutin

American Economic Journal: Microeconomics, 2016, vol. 8, issue 3, 64-94

Abstract: Patent pools reduce prices when selling complementary inputs to technologies, but can also effectively cartelize markets when involving substitutes. Independent licensing, by reintroducing competition, ensures that only good pools form when there are two patent holders involved. For larger pools, independent licensing needs to be complemented by other policy tools. We propose to constrain the royalties for the patents individually licensed outside the pool with price caps replicating the pool's sharing rule. This information-free screening device works with asymmetries, even when licensors try to stabilize pools by readjusting the sharing rule in a way that may not reflect contributions.

JEL-codes: D21 D45 K11 L12 L24 O31 O34 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/mic.20140237
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Screening for Good Patent Pools through Price Caps on Individual Licenses (2014)
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