Patent Licensing in the Presence of Trade Barriers

Kuang-Cheng Andy Wang, Ching-Chih Tseng and Wen-Jung Liang
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Kuang-Cheng Andy Wang: Chang Gung University
Ching-Chih Tseng: National Dong Hwa University
Wen-Jung Liang: National Dong Hwa University

The Japanese Economic Review, 2016, vol. 67, issue 3, No 5, 329-347

Abstract: Abstract We develop a two-country duopoly model to explore the optimal licensing contract for an outsider licensor in terms of fixed-fee and royalty licensing by taking into account trade barriers when firms produce a homogeneous product and engage in Bertrand competition in each market. The present paper focuses on the interaction between licensing and trade barriers in two international markets. We show that both royalty and non-exclusive fixed-fee licensing can be optimal. Furthermore, exclusive fixed-fee licensing can be optimal, which is a result that is not discussed in the existing literature.

Keywords: D43; D45; L13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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DOI: 10.1111/jere.12098

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