Gordanier, John and Chun-Hui, Miao (2009): Sequential Innovation and the Duration of Technology Licensing.
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We model an innovator's choice of payment scheme and duration as a joint decision in a multi-period licensing game with potential sequential innovations and some irreversibility of technology transfer. We find that it may be optimal to license the innovation for less than the full length of the patent and that royalty contracts can be used to overcome a time-consistency problem faced by the innovator. Our results suggest that licensing contracts based on royalty have a longer duration than fixed-fee licenses and are more likely to be used in industries where sequential innovations are frequent.
|Item Type:||MPRA Paper|
|Original Title:||Sequential Innovation and the Duration of Technology Licensing|
|Keywords:||Innovation, Licensing, Patent, Royalty, Technology Leakage, Time Consistency.|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L24 - Contracting Out; Joint Ventures; Technology Licensing
|Depositing User:||Chun-Hui Miao|
|Date Deposited:||21. Aug 2009 09:10|
|Last Modified:||12. Feb 2013 05:14|
Anand, B.N. and T. Khanna, "The Structure of Licensing Contracts," Journal of Industrial Economics, 2000, 48 (1), 103�135.
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