Compulsory license threats in a signaling game of drug procurement

Damien Besancenot and Samira Guennif
Additional contact information
Samira Guennif: Université Sorbonne Paris Nord

Theory and Decision, 2024, vol. 97, issue 2, No 3, 298 pages

Abstract: Abstract This paper presents a signaling game to formalize the interaction between a developing country and a pharmaceutical firm negotiating the supply of an essential medicine. During these negotiations, the government may threaten the firm with the issue of a compulsory license to force price reductions. However, the threat may be a poor signaling device of the government’s willingness to issue a compulsory license. Our model shows that, for a government, the threat may be used in various ways to fool the pharmaceutical firm about its real objectives. This result is consistent with stylized facts showing that threat strategies are used to obtain very opposite outcomes.

Keywords: Voluntary license; Compulsory license; Price negotiations; Drug procurement; Signaling game (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11238-024-09978-8 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:theord:v:97:y:2024:i:2:d:10.1007_s11238-024-09978-8

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11238/PS2

DOI: 10.1007/s11238-024-09978-8

Access Statistics for this article

Theory and Decision is currently edited by Mohammed Abdellaoui

More articles in Theory and Decision from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().