Munich Personal RePEc Archive

Licensing Cost-Reducing Innovations Under Supply Function Competition

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

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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.

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