Licensing a new product: Fee vs. royalty licensing with unionized labor market

Arijit Mukherjee

Labour Economics, 2010, vol. 17, issue 4, 735-742

Abstract: In an economy with unionized labor market, we show that the payoff of an outside innovator may be higher under royalty licensing than under fixed-fee licensing and auction, if bargaining power of the labor union is sufficiently high. This result holds for both decentralized and centralized bargaining. It follows from our analysis that a combination of fixed-fee and output royalty can be preferable to the innovator compared to both royalty only licensing and auction (or fixed-fee licensing). We discuss the implications of positive opportunity costs of the licensees.

Keywords: Auction; Fixed-fee; Labor; union; Licensing; Royalty (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Working Paper: Licensing a new product: Fee vs. royalty licensing with unionized labor market (2007)
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