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Optimal Two-Part Tariff Licensing in a Differentiated Mixed Duopoly

Author

Listed:
  • Wang Jing
  • Yang Fangbai

    (School of Mathematics, Liaoning Normal University, Dalian116029, China)

Abstract

This paper considers the two-part tariff licensing by an innovating firm to its potential competitor in a differentiated mixed duopoly, in which one firm sets a quantity and the other firm charges a price. Based on the development cost incurred by the rival, we derive the optimal behavior of the firms under full information case and partial information case respectively. Information difference on the equilibrium strategies is also investigated.

Suggested Citation

  • Wang Jing & Yang Fangbai, 2017. "Optimal Two-Part Tariff Licensing in a Differentiated Mixed Duopoly," Journal of Systems Science and Information, De Gruyter, vol. 5(3), pages 279-288, June.
    • Handle: RePEc:bpj:jossai:v:5:y:2017:i:3:p:279-288:n:6
    DOI: 10.21078/JSSI-2017-279-10
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    References listed on IDEAS

    as
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    3. Kangsik Choi, 2012. "Price And Quantity Competition In A Unionised Mixed Duopoly: The Cases Of Substitutes And Complements," Australian Economic Papers, Wiley Blackwell, vol. 51(1), pages 1-22, March.
    4. Nguyen, Xuan & Sgro, Pasquale & Nabin, Munirul, 2014. "Licensing under vertical product differentiation: Price vs. quantity competition," Economic Modelling, Elsevier, vol. 36(C), pages 600-606.
    5. Wang, X Henry & Yang, Bill Z, 1999. "On Licensing under Bertrand Competition," Australian Economic Papers, Wiley Blackwell, vol. 38(2), pages 106-119, June.
    6. Kitagawa, Tatsuya & Masuda, Yasushi & Umezawa, Masashi, 2014. "Patent strength and optimal two-part tariff licensing with a potential rival," Economics Letters, Elsevier, vol. 123(2), pages 227-231.
    7. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
    Full references (including those not matched with items on IDEAS)

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