Munich Personal RePEc Archive

On the Duration of Technology Licensing

Gordanier, John and Chun-Hui, Miao (2009): On the Duration of Technology Licensing.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_20329.pdf

Download (451kB) | Preview

Abstract

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 more profitable than fixed-fee licensing even in the absence of information asymmetry and risk aversion. Moreover, 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 and intellectual property protection is weak. Our paper also highlights an important link between the study of technology licensing and the theory of durable goods.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.