Patent Licensing in a Leadership Structure

Kabiraj, Tarun

doi:10.1111/j.1467-9957.2004.00388.x

Cited by 49 publications

(50 citation statements)

References 16 publications

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“…In a complete information framework, if the patentee is an outsider, then fixed-fee licensing dominates royalty licensing (Kamien and Tauman, 1986;Katz and Shapiro 1986;Kamien, 1992), whereas in a leadership structure the optimal contract depends on the innovation size (Kabiraj, 2004).…”

Section: Introductionmentioning

confidence: 99%

Licensing Contract in a Stackelberg Model*

Filippini

2005

Manchester School

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We study optimal linear licensing and its social welfare implications when the innovator (patentee) is an insider that can make capacity/output commitment so as to act as a Stackelberg leader in the output market. We show that (i) the patentee's profit-maximizing licensing contract is a royalty; (ii) the optimal royalty rate is greater than the cost reduction attained by the licensed technology and is increasing in the number of competitors; (iii) optimal licensing maximizes the likelihood of technology transfer, may reduce social welfare and always makes consumers worse off; and (iv) the innovator benefits from capacity commitment, and the more competitive the output market, the greater the gains it makes by licensing. The opposite holds for consumers.

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Section: Introductionmentioning

confidence: 99%

Licensing Contract in a Stackelberg Model*

Filippini

2005

Manchester School

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“…Kamien and Tauman (1986) shows that if the licensor lacks production capacity, a fixed fee is better than a royalty, and is also better for consumers. This topic is addressed under Stackelberg oligopoly both when a licensor has production capacity (Wang and Yang (2004); Kabiraj (2005);Filippini (2005)) and when it lacks production capacity (Kabiraj (2004)). La Manna (1993) analyzes a Cournot oligopoly with a fixed fee under cost asymmetry, and shows that if technologies can be replicated perfectly, a lower-cost firm always has an incentive to transfer its technology.…”

Section: Related Literaturementioning

confidence: 99%

Subsidizing New Technology Adoption in a Stackelberg Duopoly: Cases of Substitutes and Complements

Hattori

Tanaka

2016

Ital Econ J

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Economic growth requires that firms adopt new technologies. However, it may be insufficient in less competitive industries from the social welfare point of view. In this case, a government subsidy is necessary. We present an analysis of firms' adoption of new technology and government subsidization policy in a Stackelberg duopoly with differentiated goods. The technology itself is free, but each firm must expend a fixed set-up cost, such as training employees. There are several cases related to optimal policies depending on the set-up costs and whether the goods are substitutes or complements. In particular, there are two cases.1. Social welfare is maximized when only the Stackelberg leader adopts the new technology, but no firm adopts the new technology without a subsidy. Then, the government should subsidize only the leader, which is a discriminatory policy. (Case 5 of Theorem 1 and Case 3-(1)-ii of Theorem 2) 2. Social welfare is maximized when both firms adopt the new technology, but only the leader adopts the new technology without a subsidy. Then, the government should subsidize only the follower. This policy is not discriminatory because adoption is the dominant strategy for the leader. (Case 2 of Theorem 1)

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“…There are references about licensor's strategic behavior, under duopoly or oligopoly such as Katz and Shapiro (1985), Kamien and Tauman (1986), Sen and Tauman (2007), La Manna (1993), and under Stackelberg competition such as Filippini (2005), Kabiraj (2004), Wang and Yang (2004). Using cooperative game theory, Watanabe and Muto (2008) studies the equilibrium among licensor and licensees.…”

Section: Introductionmentioning

confidence: 99%

Competitiveness and Subsidy or Tax Policy for New Technology Adoption in Duopoly

Hattori

Tanaka

2016

Global Economic Review

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We consider a problem of subsidy or tax policy for new technology adoption by duopolistic firms. The technology is developed in and transferred by a foreign country to the domestic country. It is free but each firm must expend some fixed set-up cost for education of its staff to adopt and use it. Assuming that each firm maximizes the weighted average of absolute and relative profits, we examine the relationship between competitiveness and subsidy or tax policies for technology adoption, and show that when firm behavior is not competitive (the weight on the relative profit is small), the optimal policy of the government may be taxation; when firm behavior is competitive (the weight on the relative profit is large), the optimal policy is subsidization or inaction and not taxation. However, if firm behavior is extremely competitive (close to perfect competition), taxation case re-emerges.

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Patent Licensing in a Leadership Structure

Cited by 49 publications

References 16 publications

Licensing Contract in a Stackelberg Model*

Licensing Contract in a Stackelberg Model*

Subsidizing New Technology Adoption in a Stackelberg Duopoly: Cases of Substitutes and Complements

Competitiveness and Subsidy or Tax Policy for New Technology Adoption in Duopoly

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