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Technology selling and innovation with bargaining

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  • Swapnendu Banerjee
  • Yuanzhu Lu
  • Sougata Poddar

Abstract

We examine when the price of technology is found through bargaining between the seller and the buyer and explore its effect on the innovation incentive. Selling the technology is preferred to licensing for the innovating firm. The possibility of selling increases the incentive for innovation compared to licensing for a range of high‐cost innovation, but reduces the incentive for a range of low‐cost innovation.

Suggested Citation

  • Swapnendu Banerjee & Yuanzhu Lu & Sougata Poddar, 2021. "Technology selling and innovation with bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 73(1), pages 100-107, January.
    • Handle: RePEc:bla:buecrs:v:73:y:2021:i:1:p:100-107
    DOI: 10.1111/boer.12235
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    References listed on IDEAS

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    1. Mukherjee, Arijit, 2006. "Patents and R&D with imitation and licensing," Economics Letters, Elsevier, vol. 93(2), pages 196-201, November.
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    6. Tauman, Yair & Weng, Ming-Hung, 2012. "Selling patent rights and the incentive to innovate," Economics Letters, Elsevier, vol. 114(3), pages 241-244.
    7. Mukherjee, Arijit & Mukherjee, Soma, 2013. "Technology licensing and innovation," Economics Letters, Elsevier, vol. 120(3), pages 499-502.
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