General licensing schemes for a cost-reducing innovation

Sen, Debapriya; Tauman, Yair

doi:10.1016/j.geb.2006.07.005

Cited by 248 publications

(221 citation statements)

References 40 publications

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“…However, jointly pro…table licensing can be welfare reducing. These results are in contrast with the ones in the duopoly case examined by Katz and Shapiro (1985), as well as the welfare results others have found with homogeneous rivals (Katz and Shapiro 1986;Sen and Tauman 2007). However, we show that licensing the most e¢ cient …rm's technology always improves social welfare, although a welfare-maximizing licensee might not be a joint-pro…t-maximizing licensee.…”

Section: Conclusion and Extensionscontrasting

confidence: 79%

“…In this case, the modi…cation of (7) will be binding: The menu auction TNE license contract is a combination of "no …xed fee" and a royalty of 0:2 to three licensees, leaving one …rm unlicensed. This result may seem to contradict a result in Sen and Tauman (2007), since they show that there is no equilibrium with royalties only. This di¤erence arises from a di¤erence in the rules of the game: they consider a game in which the licensor announces a licensing policy, unlike our menu auction game.…”

Section: Conclusion and Extensionsmentioning

confidence: 75%

“…Sen and Tauman (2007) and others analyze license contracts involving royalties and …xed fees. The usefulness of including royalties for the licensor is that it o¤ers a tool to control a licensee's output level and the market price.…”

Section: Conclusion and Extensionsmentioning

confidence: 99%

“…In contrast, Katz and Shapiro (1985) …nd that pro…table transfers never reduce welfare in a duopoly, which underlies the importance of considering non-duopoly markets. Katz and Shapiro (1986) and Sen and Tauman (2007) …nd that with homogeneous …rms, licensing always raises welfare, so heterogeneity is important in evaluating the welfare implications of licensing. Although a transfer from a su¢ ciently ine¢ cient licensor can reduce welfare, we show that if the most e¢ cient …rm makes a complete transfer then social welfare always increases under general demand (Theorem 2).…”

Section: Introductionmentioning

confidence: 99%

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Choosing a licensee from heterogeneous rivals

Creane

Konishi

2013

Games and Economic Behavior

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We examine a …rm that can license its production technology to a rival when …rms are heterogeneous in production costs. We show that a complete technology transfer from one …rm to another always increases joint pro…t under weakly concave demand when at least three …rms remain in the industry. A jointly pro…table transfer may reduce social welfare, although a jointly pro…table transfer from the most e¢ cient …rm always increases welfare. We also consider two auction games under complete information: a standard …rst-price auction and a menu auction by Bernheim and Whinston (1986). With natural re…nement of equilibria, we show that the resulting licensees are ordered by degree of e¢ ciency: menu auction, simple auction, and joint-pro…t maximizing licensees, in (weakly) descending order. JEL:D4, L24, L4

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Section: Conclusion and Extensionscontrasting

confidence: 79%

Section: Conclusion and Extensionsmentioning

confidence: 75%

Section: Conclusion and Extensionsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Choosing a licensee from heterogeneous rivals

Creane

Konishi

2013

Games and Economic Behavior

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“…hazard (Macho-Stadler et al, 1996 andCho, 2001), risk aversion (Bousquet et al, 1998), incumbent innovator (Shapiro, 1985, Kamien and Tauman, 2002and Sen and Tauman, 2007, leadership structure (Kabiraj, 2004), strategic incentive delegation (Saracho, 2002), integer constraint on the number of licenses (Sen, 2005), input market power and convex costs . 4 An important feature of the above mentioned papers, except Muto (1993) and Poddar and Sinha (2004), is their focus on homogeneous goods, thus ignoring the effects of product variety.…”

Section: Introductionmentioning

confidence: 99%

Technology licensing in a differentiated oligopoly

Bagchi

Mukherjee

2014

International Review of Economics & Finance

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Abstract:We show the effects of product differentiation and product market competition on technology licensing by an outside innovator. For a certain range of product differentiation, both the innovator and the society prefer royalty licensing compared to auction (or fixed-fee), irrespective of Cournot and Bertrand competition, if the number of potential licensees is sufficiently large. Hence, for such a range of product differentiation, neither the innovator nor the antitrust authority requires information about the type of product market competition in preferring the licensing contract.

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Optimal licensing strategy of green technology in a mixed oligopoly: Fixed fee versus royalty

2020

Manage Decis Econ

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This paper develops a mixed oligopoly model to explore the optimal licensing strategy of green technology. In our model, either private firm or public firm could be the patentee. We show that when the private firm is the patentee, all the two types of licensing contracts (i.e., fixed fee and royalty) are optimal. However, when the public firm is the patentee, the fixed fee licensing is the optimal licensing contract. We examine the welfare consequence of a privatization policy under the optimal licensing contract and show that the privatization policy hinder the improvement of social welfare.

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General licensing schemes for a cost-reducing innovation

Cited by 248 publications

References 40 publications

Choosing a licensee from heterogeneous rivals

Choosing a licensee from heterogeneous rivals

Technology licensing in a differentiated oligopoly

Optimal licensing strategy of green technology in a mixed oligopoly: Fixed fee versus royalty

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