Licensing and information disclosure under asymmetric information

Jeon, Haejun

doi:10.1016/j.ejor.2019.01.005

Cited by 16 publications

(4 citation statements)

References 40 publications

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“…This result is robust to the extensions that litigation costs are included, that the innovator can also offer two‐part contracts, and that the innovator is an insider. Jeon (2019b) considers the situation where an outsider innovator has private information about the quality of innovation. He assumes that an upstream leader can license its technology to a downstream firm, but another upstream follower may challenge the technology, in which case the leader will file a lawsuit over infringement upon such a challenge.…”

Section: The Related Literaturementioning

confidence: 99%

Patent licensing for signaling the cost‐reduction innovation: The case of the insider innovator

Wu,

Tsai

2023

J Public Economic Theory

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We analyze the patent licensing contracts offered by an insider innovator that has private information about the quality of innovation that can be transferred to two downstream firms. When information is complete, the first‐best choice is a pure‐royalty contract which is accepted by both firms (i.e., is nonexclusive). When information is incomplete, however, no nonexclusive contract can be supported as a separating equilibrium; it can only be the case where the innovator sells an exclusive contract to only one firm or a nonlicensing contract where no license is sold. In particular, when the gap in the innovation between the efficient and inefficient type is sufficiently small, there does not exist any separating equilibrium. It is sharply different from the case of an outsider innovation, in which a separating equilibrium always exists.

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Section: The Related Literaturementioning

confidence: 99%

Patent licensing for signaling the cost‐reduction innovation: The case of the insider innovator

Wu,

Tsai

2023

J Public Economic Theory

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“…For example, Cao et al (2020) took quality information as the object, and examine the impact of voluntary and mandatory information disclosure on the equilibrium strategy, payment and consumer surplus of manufacturers and retailers. Jeon (2019) and Chondrakis et al (2019) have studied technological information disclosure. The former found that in the case of technological information disclosure, innovators invest in R&D earlier, while the latter found that increasing technological information disclosure increases M & An activities.…”

Section: Information Disclosurementioning

confidence: 99%

Blockchain’s role in e-commerce sellers’ decision-making on information disclosure under competition

et al. 2022

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In e-commerce, sellers can disclose product information (such as quality, size information, function, and so on) to make consumers understand the products. However, in the process of information disclosure, consumers often fall into information distortion or information loss. Because of its immutability and traceability, blockchain can help e-commerce sellers improve information disclosure and ensure the efficiency of information transmission. We study a duopoly competitive e-commerce market in which two e-commerce sellers compete in information disclosure. According to whether to apply blockchain, we divide the sellers’ decision-making into four research scenarios (NN, BN, NB, BB). Based on the above four scenarios, we get the market demand of different products depending on the consumer utility, and further establish the game model in the competitive environment. This paper explores the impact of blockchain on information disclosure and consumer surplus, and achieves the Nash equilibrium of blockchain application for both sides. In the expansion model, we study e-commerce sellers’ risk aversion and capital constraints, and further explore their impact on blockchain in practice. Finally, combining with blockchain’s characteristics, we also analyze the impact of the application of blockchain at other aspects on the supply chain. We find that when consumers' trust in information is low or the cost of blockchain applications is low, all e-commerce sellers in competition will adopt blockchain. In addition, when consumers have low trust in information, it will be difficult to achieve complete equilibrium in the application of blockchain as their risk aversion increases. For capital constrained sellers, when the cost of blockchain application is low, it will be difficult to achieve full equilibrium for blockchain applicants as the bank financing rate increases.

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“…The difference in their finding is determined by whether the patent holder is an insider or not. Some studies examine the impact of other factors such as different market structures (Katz and Shapiro, 1985), type of competition (Kabiraj, 2004), network effect (Lin and Kulatilaka, 2006;Zhang et al, 2018), imitation costs (Kogan et al, 2013), cross-licensing (Zhao, 2017;Jeon and Lefouili, 2018;Choi and Gerlach, 2019;Wang and Huang, 2019;Zhao et al, 2022); and information asymmetry (Sen and Bhattacharya, 2017;Jeon, 2019;Hong et al, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

Mixed competition and technology licensing in a supply chain

Zhang

Zhou

2022

Front. Psychol.

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Technology licensing as a vital part of business behavior in many industries has drawn a fair amount of attention in industrial organization literature. Most existing literature on licensing decisions assumes that all firms engage in Cournot or Bertrand competition, while the type of mixed competition may affect the choice of the licensor. In this context, what decision will the licensor make faced with different mixed competitions? This paper studies the optimal technology licensing contract of a licensor firm engaging in different mixed competitions (Cournot-Bertrand or Bertrand-Cournot) with a potential licensee in a differentiated duopoly market considering one upstream firm (supplier) that provides key inputs. We find that if either the royalty or fixed-fee licensing is applied, the licensor favors royalty licensing under Bertrand-Cournot competition when the degree of substitution is small and prefers the fixed-fee licensing no matter under what kind of mixed competition as the degree of substitution increases. In the case of fixed-fee licensing, the result shows that the profits of licensors are the same under different types of mixed competition. Besides, fixed-fee licensing is not always the optimal choice for consumers, and they would prefer royalty licensing when the degree of substitution is very small.

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Licensing and information disclosure under asymmetric information

Cited by 16 publications

References 40 publications

Patent licensing for signaling the cost‐reduction innovation: The case of the insider innovator

Patent licensing for signaling the cost‐reduction innovation: The case of the insider innovator

Blockchain’s role in e-commerce sellers’ decision-making on information disclosure under competition

Mixed competition and technology licensing in a supply chain

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