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Technological spillover and the time distribution of licenses

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Author Info
Elisabetta Ottoz () (Dipartimento di Economia)

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Abstract

The aim of this note is to study the optimal licensing of a non drastic cost reducing patented innovation, if the patent holder facing spillover is not only concerned with the optimal number of licenses, but also with their time distrbution. A simple three agents model, a patentee and two adopting firms, elucidates the conditions under which the patent holder prefers exclusive innovation exploitation, giving rise to a monopoly, non exclusive exploitation giving rise to a duopoly of simultaneous adoption or a mix of exclusive exploitation in the first period and non exclusive one in the second period, giving rise to a diffusion process. The results show that for very small cost reductions the patent holder prefers early simultaneous adoption, whereas diffusion, implying asymmetric adoption, is better if the innovation implies a more substantial cost reduction, coupled with a sufficient spillover. Exclusive license is limited to a consistent innovation with very little spillover.

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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 15 (2005)
Issue (Month): 15 ()
Pages: 1-10
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:v:15:y:2005:i:15:p:1-10

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Related research
Keywords: licenses; spillover; technological diffusion;

Find related papers by JEL classification:
O3 - Economic Development, Technological Change, and Growth - - Technological Change
D4 - Microeconomics - - Market Structure and Pricing

References listed on IDEAS
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    Other versions:
  3. Gotz, Georg, 2000. "Strategic timing of adoption of new technologies under uncertainty: A note," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 369-379, February. [Downloadable!] (restricted)
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    Other versions:
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    Other versions:
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    Other versions:
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