The quality of licensed technology

Technology transfer in a horizontally differentiated product market

“…For () E [0, ()*), it is optimal for the licenser to make a combination of positive per unit output royalty (except for () = 0) and positive up-front fixed fee in a patent licensing contract. Hence, this is in sharp contrast to the finding of previos work (see, e.g., Rockett, 1990 comes from the non-negativity constraint on fixed fee. Now, we look at the relationship between the threat of imitation and the degree of product differentiation.…”

“…Since in this constrained situation the adjustment of rand F is similar to that of Rockett(1990), we choose to omit the discussion in detail here. 6Mukherjee and Marjit (1997) shows this in a situation with costless imitation.…”

“…Rockett (1990), sufficiently large product differentiation makes these imitation costs non-binding and best technology is transferred for all imitation costs.…”

“…For the references relevant to the present work one may look at Rockett (1990) and Marjit (1992, 1993). While Rockett (1990) is interested to examine the optimal patent licensing contract and the quality of the transferred technology in a duopoly when the licensee can imitate the licensed technology, Marjit (1992, 1993) examine optimal quality of the licensed technology under the threat of entry from the licensee to the licenser's market.…”

“…While Rockett (1990) is interested to examine the optimal patent licensing contract and the quality of the transferred technology in a duopoly when the licensee can imitate the licensed technology, Marjit (1992, 1993) examine optimal quality of the licensed technology under the threat of entry from the licensee to the licenser's market. 1 The present paper also considers a duopoly market where the licenser and the licensee compete in the same market.…”