Optimal licensing of cost-reducing innovation

Kamien, Morton I.; Oren, Shmuel S.; Tauman, Yair

doi:10.1016/0304-4068(92)90036-7

Cited by 247 publications

(174 citation statements)

References 5 publications

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“…It is worth mentioning that, since the opportunity costs of the licensees in our analysis do not depend on the type of the licensing contract, there is no difference between an auction and a licensing contract where the fixed-fee is charged by the innovator (see Kamien et al, 1992). Hence, whatever we report under auction is also relevant for a fixed-fee licensing.…”

Section: Introductionmentioning

confidence: 78%

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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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Section: Introductionmentioning

confidence: 78%

“…However, it is immediate from Kamien et al (1992) Under auction, at stage 1, I announces an auction of k licenses, where 1 k n ≤ ≤ . At stage 2, the licensees simultaneously and independently decide whether or not to purchase a license, and how much to bid.…”

Section: Cournot Competitionmentioning

confidence: 99%

Technology licensing in a differentiated oligopoly

Bagchi

Mukherjee

2014

International Review of Economics & Finance

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“…12 However, for each L K, the LHS is di¤erentiable for Q satisfying P (Q) c`for all`2 L, and P (Q) < c k for all k 2 KnL, and the derivative is…”

Section: Conclusion and Extensionsmentioning

confidence: 99%

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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“…The role of licensing in reference to innovative activity has been studied in-depth since 1980s and early 1990s: Shapiro (1985, 1986), Gallini (1984), Gallini and Winter (1985), Kamien and Tauman (1986), Kamien, Oren and Tauman (1992). They show the limits of voluntary licensing, compare the incentives to innovate in the presence and absence of licensing, consider the results for social welfare, compare different forms of compensation for licensing (fixed fee, royalty or auctions for licenses) and different forms of oligopolistic relationships (such as Cournot, Bertrand, and Stackelberg) Our agenda is very close to this but we focus on compulsory licensing as an element of competition (or pro-competition) policy and do not choose between different modes of oligopolistic relationships and different forms of compensation presuming the existence of a fixed-fee system, and modelling the interactions between players a la Cournot.…”

Section: Introductionmentioning

confidence: 99%

Incentives for Process Innovations Under Discrete Structural Alternatives of Competition Policy

Shastitko

Kurdin

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in INCENTIVES FOR PROCESS INNOVATIONS UNDER DISCRETE STRUCTURAL ALTERNATIVES OF COMPETITION POLICY 3This study analyses the incentives for process innovations under different conditions determined by the competition policy for intellectual property rights (IPR) and particular features of markets and technologies. Competition policy is defined by the presence or absence of compulsory licensing, markets are characterized by technological leadership or technological competition. The results of modelling show that the uncertainty engendered by technological competition may lower the intensity of innovative activities, if there are no mechanisms of coordination between participants. Voluntary licensing generally improves social welfare but does not guarantee an increase in innovative efforts. Compulsory licensing can impede innovations due to the opportunistic behaviour of market participants but certain measures of state policy can prevent this negative effect. JEL-codes: L24, O31, K21

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Optimal licensing of cost-reducing innovation

Cited by 247 publications

References 5 publications

Technology licensing in a differentiated oligopoly

Technology licensing in a differentiated oligopoly

Choosing a licensee from heterogeneous rivals

Incentives for Process Innovations Under Discrete Structural Alternatives of Competition Policy

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