Royalty and license fee under oligopoly with or without entry of innovator: Two-step auction

Masahiko Hattori and Yasuhito Tanaka

MPRA Paper from University Library of Munich, Germany

Abstract: When an outside innovating firm has a cost-reducing technology, it can sell licenses of its technology to incumbent firms, or enter the market and at the same time sell licenses, or enter the market without license. We examine the definitions of license fees in such situations under oligopoly with three firms, one outside innovating firm and two incumbent firms, considering threat by entry of the innovating firm using a two-step auction. Also we suppose that the innovating firm sells its licenses using a combination of royalty per output and a fixed license fee.

Keywords: license; entry; oligopoly; innovating firm; two-step auction (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2017-05-01
New Economics Papers: this item is included in nep-ino and nep-ipr
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