Licensing Cost-Reducing Innovations Under Supply Function Competition

Saglam, Ismail (2021): Licensing Cost-Reducing Innovations Under Supply Function Competition.

Abstract

In this paper, we study the problem of licensing cost-reducing innovations in a duopoly under supply function competition. We show that the innovator prefers fixed-fee licensing to no licensing if its cost advantage is not extremely large. Moreover, if its cost advantage is not extremely small, the innovator prefers fixed-fee licensing to royalty licensing, as well.

• Item Type: MPRA Paper
• Language: English
• Keywords: Duopoly; licensing; supply function competition.
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General

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