Technology Licensing and Grantbacks under Hidden Information

Richard Dutu and Benoit Julien

Journal of Institutional and Theoretical Economics (JITE), 2009, vol. 165, issue 4, 561-578

Abstract: This paper explores technological transfer via licensing under hidden information. The transaction features a quality choice of technology to be transferred between a licensor and a licensee that has private information about its ability to implement and refine the technology. The model accounts for the possible damage that drastic refinements and reverse licensing can do to the licensor´s market position, and makes predictions on the structure of licensing contracts. We show under what conditions a licensing contract will include a further contractual provision such as a grantback clause. Finally, the welfare implications of grantback inclusion are assessed.

JEL-codes: D82 L14 L42 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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