Technology licensing in mixed oligopoly

Chen, Yiwen; Yang, Ya‐Po; Wang, Leonard F.S.; Wu, Shih-Jye

doi:10.1016/j.iref.2014.02.002

Cited by 32 publications

(13 citation statements)

References 22 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The authors compared per-unit royalty licensing with fixed-fee licensing and concluded that the inside innovator receives greater total profit with per-unit royalty licensing. Beyond that, a strand of literature examines per-unit royalty licensing with the introduction of innovation decisions (Gallini and Winter, 1985;Mukherjee, 2005), foreign competition , mixed oligopoly (Chen et al, 2014), and so on.…”

mentioning

confidence: 99%

Ad Valorem Versus Per‐unit Royalty Licensing in a Cournot Duopoly Model

Hsu

Liu

Wang

et al. 2019

The Manchester School

View full text Add to dashboard Cite

Ad valorem royalty licensing is implemented when the licensor (i.e., patent‐holding firm) obtains ownership shares in the licensee as payment once the new technology is transferred. In a Cournot duopoly model, we compare two licensing forms between competitors of different productivity, ad valorem and per‐unit royalty licensing. This paper finds that ad valorem royalty licensing is superior to per‐unit royalty licensing for the patent‐holding firm when the cost‐reducing innovation is non‐drastic. The reason for this result is that cross ownership reduces output market competition and thus the patent‐holding firm enjoys better profit margins by strategically setting the share ratio. Furthermore, we show that the relieved competition under ad valorem royalty licensing pulls down the industry output, and thus hurts consumer surplus and social welfare in comparison to per‐unit royalty licensing.

show abstract

mentioning

confidence: 99%

Ad Valorem Versus Per‐unit Royalty Licensing in a Cournot Duopoly Model

Hsu

Liu

Wang

et al. 2019

The Manchester School

View full text Add to dashboard Cite

show abstract

“…The foreign firm is inclined to choose royalty if the substitutability is relatively large, but prefers the fixed-fee approach once the substitutability is relatively insignificant. Chen et al [18] develops a mixed oligopoly model with one public firm and two private firms to explore the licensing strategy considered by the innovative private firm. They find the public firm may or may not accept the technology licensing offer from the private firm; if the public firm accepts the licensing, all of the three different types of licensing contracts (royalty, fixed-fee and two-part tariff) can all be optimal licensing contracts to the same degree.…”

Section: Literature Reviewmentioning

confidence: 99%

On the Sustainability of Technology Licensing Under Asymmetric Information Game

Tsai

et al. 2019

Sustainability

View full text Add to dashboard Cite

Past research indicates that a licensor tends to adopt the fixed fee, in order to obtain higher profit rather than secure royalty when he participates in zero production in the market. This study instead finds that the patentee’s optimum strategy may vary. In addition to the fixed-fee strategy, royalty or mixed licensing, or fixed fee plus royalty may be potential choices for the patentee as well which is depend on the market scale, incidence of market scale, and magnitude of cost-saving. The patentee may choose to only authorize a type of high market size based on self-interested motives. The technology licensing market is not sustainable.

show abstract

“…Endogenous entry has been widely discussed in the recent literature on industrial organization. 7 Our model setting is related to several papers dealing with free entry and output 5 Chen et al (2014) investigate a mixed oligopoly. In their model, there are two private firms and one public firm, and one of the private firms owns a cost innovation and decides its optimal licensing strategies.…”

Section: Related Literaturementioning

confidence: 99%

Endogenous Market Structure and Technology Licensing

Chen¹

2016

Jpn Econ Rev

View full text Add to dashboard Cite

This paper analyses the optimal licensing strategy of a licensor firm that competes with potential licensee firms in an industry with endogenous entry. The optimal licensing strategy of the licensor firm is to have zero royalty and positive fixed fees, which is a result that sharply contrasts with the existing literature whereby licensor firms tend to charge positive royalties to their rival licensees. Under the optimal licensing strategy, the licensor firm and the licensee firms are active in the market, but not the non‐licensed firms. This equilibrium market structure is socially desirable if the fixed production cost is not too small.

show abstract

Technology licensing in mixed oligopoly

Cited by 32 publications

References 22 publications

Ad Valorem Versus Per‐unit Royalty Licensing in a Cournot Duopoly Model

Ad Valorem Versus Per‐unit Royalty Licensing in a Cournot Duopoly Model

On the Sustainability of Technology Licensing Under Asymmetric Information Game

Endogenous Market Structure and Technology Licensing

Contact Info

Product

Resources

About