Excess‐entry Theorem: The Implications of Licensing*

Mukherjee, Arijit; Mukherjee, Soma

doi:10.1111/j.1467-9957.2008.01088.x

Cited by 37 publications

(22 citation statements)

References 36 publications

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“…Cabral (2004) shows that entry can be insufficient under simultaneous entry, while it may be excessive under sequential entry. Mukherjee and Mukherjee (2008) show insufficient entry in the presence of technology licensing. Mukherjee (2010) shows insufficient entry in the presence of external economies of scale.…”

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confidence: 97%

Social Efficiency of Entry with Market Leaders

Mukherjee

2012

Economics Manag Strategy

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We offer a new perspective to the social efficiency of entry by considering an industry with a quantity‐setting leader and free entry of followers. We show that entry with homogeneous products can be socially insufficient instead of excessive. In a closed economy, entry is always socially insufficient in the absence of scale economies, and it is socially insufficient in the presence of scale economies if the marginal cost difference between the leader and the followers is large. In an open economy with the foreign leader, entry is always socially insufficient. Thus, we show that entry regulation may not be justified in oligopolistic industries with market leaders.

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confidence: 97%

Social Efficiency of Entry with Market Leaders

Mukherjee

2012

Economics Manag Strategy

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“…We allow the patentee to determine the licensee firms. This paper also complements the welfare-reducing licensing literature, which shows that may delete welfare; see for example, Eswaran (1994), Lin (1996), Erutku and Richelle (2000), Faul ı-Oller and Sandonis (2002), Erkal (2005), Fillipini (2005), Mukherjee and Mukherjee (2008) and .…”

Section: Introductionmentioning

confidence: 57%

“…We consider only fixed fee licensing. In the literature, the licensor adopts fixed fee licensing, because the technology is easy to imitate (Katz and Shapiro, 1985;Vishwasrao, 1994), or the output of the licensees is hard to monitor (Mukherjee and Mukherjee, 2013). 7.…”

Section: Notesmentioning

confidence: 99%

International Technology Transfer and Welfare

Kuo

Lin

Peng

2016

Review Development Economics

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We investigate the welfare effect of international technology transfer in a quality model. A foreign innovator with a new quality product can license its innovation to the domestic firm(s) via a fixed fee. Findings show that the foreign innovator will license exclusively to the high‐quality firm under Bertrand competition, whereas it may exclusively license to the high‐quality firm, the low‐quality firm, or non‐exclusively to both firms under Cournot competition. Non‐exclusive licensing is necessarily welfare‐enhancing whereas exclusive licensing is welfare‐reducing if the quality of the new technology is not sufficiently superior to that of the domestic ones.

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“…Therefore, the simultaneous co-opetition is modeled as 5 Matsumura and Okamura (2006) show that the equilibrium number of firms can be either excessive or insufficient in a spatial price discrimination model. Mukherjee and Mukherjee (2008) theoretically show that free entry can result in socially insufficient entry in the presence of technology licensing. 6 For the welfare evaluation of entry regulation, Kim (1997) considers the strategic behavior of firms and the government and shows that entry regulation to prevent excess entry induces the incumbent to behave strategically against the government.…”

Section: Basic Frameworkmentioning

confidence: 99%

Free entry and social inefficiency under co-opetition

Hattori

Yoshikawa

2015

J. Econ.

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We investigate the social desirability of free entry in the co-opetition model in which firms compete in a homogeneous product market while sharing common property resources that affect market size or consumers' willingness to pay for products. We show that free entry leads to socially excessive or insufficient entry into the market in the case of non-commitment co-opetition, depending on the magnitude of "business stealing" and "common property" effects of entry. On the other hand, in the case of pre-commitment co-opetition, free entry leads to excess entry and a decline in the common property resources. Interestingly, in the latter case, the excess entry result of Mankiw and Whinston (1986) and Suzumura and Kiyono (1987) holds even when there are no entry (set-up) costs for entrants. These results have important policy implications for entry regulations.

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Excess‐entry Theorem: The Implications of Licensing*

Cited by 37 publications

References 36 publications

Social Efficiency of Entry with Market Leaders

Social Efficiency of Entry with Market Leaders

International Technology Transfer and Welfare

Free entry and social inefficiency under co-opetition

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