On the superiority of fixed fee over auction in asymmetric markets
Giorgos Stamatopoulos () and
Games and Economic Behavior, 2009, vol. 67, issue 1, 331-333
It is well known that selling licenses for the use of a cost-reducing innovation by auction yields a higher revenue compared to fixed fee in a symmetric Cournot industry. In this note we show that this result can be reversed in an asymmetric Cournot industry, i.e., the fixed fee policy can generate a strictly higher revenue than the auction policy in an industry where prior to the innovation firms are cost-asymmetric.
Keywords: Cost-reducing; innovation; Asymmetric; firms; Fixed; fee; Auction (search for similar items in EconPapers)
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