Patent licensing under cost asymmetry among firms

Kuang-Cheng Andy Wang, Wen-Jung Liang and Pin-Shu Chou

Economic Modelling, 2013, vol. 31, issue C, 297-307

Abstract: This paper extends Poddar and Sinha's (2010) duopolistic model to an oligopolistic model consisting of three cost differential firms engaging in Cournot competition. The focus of the paper is on the impact of the differences in efficiency among the three firms on the choices of the patentee's optimal licensing contract. By confining the number of licenses to one license only, the paper derives a more comprehensive result than that in Poddar and Sinha (2010). In addition, it shows that the insider patentee may choose pure fixed-fee, mixed or pure royalty licensing regardless of licensing to one or two licensees. This paper also proves that the optimal licensing contract can be either exclusive or non-exclusive, depending upon the relative cost advantage between the two licensees.

Keywords: Patent licensing; Insider patentee; Cost differential firms; The protection effect; The efficiency effect (search for similar items in EconPapers)
JEL-codes: D43 D45 L13 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:31:y:2013:i:c:p:297-307

DOI: 10.1016/j.econmod.2012.11.025

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