The role of asymmetric innovation’s sizes in technology licensing under partial vertical integration

Mariola Sánchez and Adrián Nerja

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we compare the scenarios of exclusive licenses and cross-licenses under the existence of partial vertical integration. To do this, a successive duopoly model is proposed, with two owners and two firms competing in a differentiated product market. Each technology owner has a share in one of the competing firms, so that competition is also extended to the upstream R&D sector. We propose a novel analysis where differences in the size of their innovation process are allowed, extending the results in Sánchez et al. (2021). We find that the cross-licensing scenario is preferred when the size of the innovation is small; this occurs regardless of the participation in the competing companies and how many innovate. If the innovation is very large, the owners may be better off with exclusive licenses.

Keywords: Patent Licensing; Exclusive licenses; Market for technology; Asymmetric innovation (search for similar items in EconPapers)
JEL-codes: L13 L24 O33 (search for similar items in EconPapers)
Date: 2024-04
New Economics Papers: this item is included in nep-com, nep-cse, nep-gth, nep-ind, nep-ino, nep-inv, nep-ipr, nep-mic, nep-reg and nep-sbm
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Related works:
Journal Article: The role of asymmetric innovation’s sizes in technology licensing under partial vertical integration (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:120829

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