Tariff-induced licensing contracts, consumers' surplus and welfare revisited

Seung-Leul Kim () and Sang-Ho Lee
Additional contact information
Seung-Leul Kim: Kangwon National University

Economics Bulletin, 2023, vol. 43, issue 2, 784 - 792

Abstract: In a trade model with technology transfer, Kabiraj and Kabiraj (2017) showed that a tariff on foreign products could induce fee licensing with zero royalty, resulting in the maximization of both consumers' surplus and domestic welfare. In this paper, we reexamine their model with an unconstrained two-part tariff licensing contract and show that if the foreign firm subsidizes the domestic firm's production via negative royalty, a higher tariff can induce a two-part tariff licensing contract, which leads to an increase in consumers' surplus and overall welfare.

Keywords: Two-part tariff contracts; Fee licensing; Negative royalty; Optimal tariff policies; Unconstrained two-part tariff licensing (search for similar items in EconPapers)
JEL-codes: F1 L2 (search for similar items in EconPapers)
Date: 2023-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I2-P64.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-22-00779

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().