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Patent hold-up and royalty stacking: the case of multiple downstream firms

Adam Karbowski () and Jacek Prokop ()

EconStor Conference Papers from ZBW - Leibniz Information Centre for Economics

Abstract: The objective of this paper is twofold. First, we study the patent hold-up problem in game-theoretic framework. We show that in subgame perfect equilibrium of the patent hold-up game the innovating manufacturer exerts reduced effort to develop the new product and the patent holder obtains the entire value of product innovation. Second, we show that royalty stacking, which is believed to magnify the patent hold-up, may cause less severe problems than the ones predicted by Lemley and Shapiro [11] when competition on the downstream product market is introduced.

Keywords: patent hold-up; royalty stacking; downstream competition (search for similar items in EconPapers)
JEL-codes: O32 O34 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~ and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esconf:127475

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