Fees versus Royalties under Partial Cross Ownership

Hsiao-chi Chen (), Shiou Shieh () and Pu-ti Su ()
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Hsiao-chi Chen: National Taipei University
Shiou Shieh: National Taipei University
Pu-ti Su: National Taipei University

Economics Bulletin, 2010, vol. 30, issue 4, 3248-3259

Abstract: This paper studies an independent patent-holder's licensing of a process innovation to a Cournot duopoly characterized by partial cross ownership. We find that royalty licensing is preferred by the patentee when the degree of cross ownership is high, whereas fixed fee licensing is preferred when the degree of cross ownership is low. When the degree of cross ownership is in the intermediate range, the superiority of fixed fee and royalty licensing depends on the magnitude of the innovations.

Keywords: Fixed fee licensing; Royalty licensing; Partial cross ownership; Cross-shareholding; Cournot duopoly (search for similar items in EconPapers)
JEL-codes: L2 O3 (search for similar items in EconPapers)
Date: 2010-12-03
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Citations: View citations in EconPapers (1)

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