License or entry with vertical differentiation in duopoly

Masahiko Hattori () and Yasuhito Tanaka

MPRA Paper from University Library of Munich, Germany

Abstract: We consider choice of options for a foreign innovating firm to license its technology for producing the high quality good to a domestic firm, or to enter the market of the domestic country with or without license. Under the assumption of uniform distribution about taste parameters of consumers; when cost functions are linear, if the low quality good’s quality is sufficiently high, license without entry strategy is optimum; if the low quality good’s quality is low, both of entry without license strategy and license without entry strategy are optimum; when cost functions are quadratic, if the high quality good’s quality is high, license without entry strategy is optimum; if the high quality good’s quality is low, entry with license strategy is optimum.

Keywords: license; entry; duopoly; vertical differentiation; foreign innovating firm (search for similar items in EconPapers)
JEL-codes: D4 D43 (search for similar items in EconPapers)
Date: 2016-05-01
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: License or entry with vertical differentiation in duopoly (2016)
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