Dilemma of quality information disclosure in technology licensing

Hong, Xianpei; Zhou, Menghuan; Gong, Yeming

doi:10.1016/j.ejor.2021.02.002

Cited by 34 publications

(9 citation statements)

References 71 publications

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“…A firm with high-quality products is reluctant to reveal quality information, while a firm with low-quality products is willing to disclose quality information. Hong et al (2021) develop a duopoly model with heterogeneous consumers to investigate technology licensing decisions and quality information disclosure strategies that benefit the patentor. The above literature examines mainly decision-making problems related to the information disclosure of new products.…”

Section: Literature Reviewmentioning

confidence: 99%

Secondhand product quality disclosure strategy of the retailer under different supply chain structures

2022

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In a two‐stage supply chain comprising a manufacturer and a retailer selling secondhand products and new products, we incorporate the manufacturer's channel decisions to examine the retailer's quality disclosure strategy of secondhand products. The quality disclosure of secondhand products may or may not be implemented, but the direct channel is always introduced. Interestingly, the retailer withholds (discloses) information of secondhand products with sufficiently high quality when it is lower (higher) than consumers' acceptance of direct channel in dual‐channel structure. If the secondhand product quality is lower than consumers' direct channel acceptance, the quality is disclosed only when it is medium.

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Section: Literature Reviewmentioning

confidence: 99%

Secondhand product quality disclosure strategy of the retailer under different supply chain structures

2022

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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%

“…In recent times, as innovation-based competition in business and economic activities become more intense, technology licensing has attracted increasing attention in many industries for its value in innovation development and commercialization (Arora et al, 2013;Agrawal et al, 2016;Hong et al, 2017Hong et al, , 2021Wu, 2018). Many factors affect the transfer and commercialization of technologies, such as competition mode (Li and Ji, 2010;Nguyen et al, 2014;Zhao et al, 2022); product differentiation (Nguyen et al, 2014(Nguyen et al, , 2017Bakaouka and Milliou, 2018), imitation costs (Kogan et al, 2013), type of innovation (Agrawal et al, 2016;Chen and Xie, 2018), bargaining power of two parties (Kishimoto, 2020), and network effect (Lin and Kulatilaka, 2006;Zhang et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

“…However, in the research on technology licensing, much of the literature related to the problems of technology licensing assumes the competition environment is either price competition (Li and Ji, 2010;Nguyen et al, 2014) or quantity competition (Hong et al, 2021;Zhao et al, 2022), and ignore the implications of mixed competition (quantity-price and price-quantity). Chang et al (2015) investigated an insider innovator's optimal licensing decision issue in the context of mixed competition; however, they ignored the existence of upstream suppliers.…”

Section: Introductionmentioning

confidence: 99%

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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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“…Since then, there have been numerous studies on technology licensing (e.g. Lin and Kulatilaka, 2006;Mukherjee and Pennings, 2006;Ashish et al, 2013;Crama et al, 2013;Avagyan et al, 2014;Bagchi and Mukherjee, 2014;Erkal and Minehart, 2014;Zhao et al, 2014;Hong et al, 2017;Wang et al, 2021a;Hong et al, 2021). For example, Bagchi and Mukherjee (2014) study a licensor's optimal licensing decisions in differentiated oligopoly markets.…”

Section: Introductionmentioning

confidence: 99%

Price and cooperation decisions in a cooperative R&D supply chain with different licensing models

Yan

Chen

Zhang

2022

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PurposeIndustry practice has shown that technology licensing has an important effect on the R&D cooperation between firms. Different licensing methods will significantly impact a supply chain member's cooperative and price R&D decisions. However, there is scant literature investigating the decision on technology licensing and its impact on a supply chain member's price and cooperative R&D decisions. To address this gap, the authors investigate the R&D cooperation and the technology licensing in a supply chain formed of an original equipment manufacturer (OEM), a contract manufacturer (CM), and a third-party manufacturer which will compete with the OEM when the technology licensing occurs.Design/methodology/approachThe authors investigate two licensing patterns, royalty licensing, fixed fee licensing together with the no licensing, within the R&D cooperative supply chain by developing two three-stage and a two-stage Stackelberg models.FindingsCompare to the no licensing strategy, technology licensing always benefits to the OEM and the society especially when the technology efficiency and the brand power of the third-party manufacturer are more significant; the royalty licensing benefits to the OEM more when the technology efficiency and the brand power of the third-party manufacturer are higher; the fixed fee licensing benefits to the OEM more when the technology efficiency and the brand power of the third-party manufacturer are lower.Practical implicationsThe royalty licensing is more effective for mitigating price competition intensity and helping firms to maintain higher sales margins; the fixed fee licensing induces firms' lower sales margins but increases the firms' sales quantities; in most cases, the fixed fee licensing is optimal from the perspectives of consumer and society, however, the CM's investment intention to the R&D technology with the fixed fee licensing is lower.Originality/valueSo far, different licensing models under the R&D cooperation have not been investigated, and the authors propose two three-stage Stackelberg models with considering the competition caused by technology licensing under the R&D cooperation to deal with the cooperative R&D and technology licensing issues.

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Dilemma of quality information disclosure in technology licensing

Cited by 34 publications

References 71 publications

Secondhand product quality disclosure strategy of the retailer under different supply chain structures

Secondhand product quality disclosure strategy of the retailer under different supply chain structures

Mixed competition and technology licensing in a supply chain

Price and cooperation decisions in a cooperative R&D supply chain with different licensing models

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