IVIE working papers o¤er in advance the results of economic research under way in order to encourage a discussion process before sending them to scienti…c journals for their …nal publication. * This paper has been partially written while the second author was visiting the Kellogg Graduate School of Management at Northwestern University. We would like to thank Bruno Cassiman, Stephen Martin, David Pérez-Castrillo and an anonymous referee from the IVIE for useful suggestions. Financial support from projects DGES PB97-0603, UPV 035.321-HB159/98 (Sandonís), CICYT PB97-0131 and the IVIE (Faulí-Oller) is gratefully acknowledged.

The optimal merger policy when e±ciency gains are not merger speci¯c but can also be achieved through licensing is derived in a di®erentiated goods Cournot duopoly. We show that whenever both royalties and fees are feasible instruments to license technology, mergers should not be allowed, which¯ts the prescription of the U.S. Horizontal Merger Guidelines. When only one instrument is feasible, however, the possibility of licensing cannot be used as a de¯nitive argument against mergers.

No abstract

In this paper we derive the optimal two-part tari¤ contract for the licensing of a costreducing innovation to a di¤erentiated goods industry of a general size. We analyze the cases where the patentee is an independent laboratory or an incumbent …rm. We show that regardless of the number of …rms, the degree of product di¤erentiation and the type of patentee, the innovation is licensed to all …rms. Moreover, we endogenize R&D investment and obtain that an internal patentee invests more (less) in R&D when the technological opportunity is low (high), which is supported by an empirical test using data on R&D expenditures of Spanish manufacturing …rms.

No abstract