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Fee versus royalty licensing in spatial Cournot competition

Stefano Colombo ()

The Annals of Regional Science, 2014, vol. 52, issue 3, 859-879

Abstract: 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)
Date: 2014
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DOI: 10.1007/s00168-014-0614-4

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The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

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Handle: RePEc:spr:anresc:v:52:y:2014:i:3:p:859-879