The dominance of fee licensing contracts under asymmetric information signaling

Manel Antelo

No E2009/08, Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces

Abstract: This paper compares different licensing contracts defined by the type of payment (fees or royalties) and contract duration (short- or long-term) in a setting in which an outside patent holder that owns a patented innovation lasting for two periods licenses it to downstream Cournot firms; further, there is asymmetric information about firms' costs emerged from the use of innovation, but they are signaled through the output produced in period 1. In this context, if we concentrate on fee contracts, the patent holder prefers short-term (revealing) contracts rather than long-term contracts.

Keywords: Licensing; signaling; fees; royalties; short- and long-term contracts; welfare (search for similar items in EconPapers)
JEL-codes: D45 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009
New Economics Papers: this item is included in nep-cta, nep-ino, nep-ipr and nep-pr~
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cea:doctra:e2009_08

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