Fee versus royalty licensing in spatial Cournot competition
Stefano Colombo ()
The Annals of Regional Science, 2014, vol. 52, issue 3, 859-879
This article investigates the optimal licensing mechanism in a spatial model where competitors set quantities and one firm owns a cost-reducing innovation. We show that when the firms spatially discriminate, the innovator gets higher profits by licensing through royalties instead than through a fixed fee, whereas in the case of uniform delivered quantities, the innovator prefers licensing by royalties (fixed fee) if and only if it has not (has) a sufficiently strong locational disadvantage with respect to the potential licensee. Copyright Springer-Verlag Berlin Heidelberg 2014
Keywords: D45; R10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:52:y:2014:i:3:p:859-879
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