The private value of a patent: A cooperative approach
AbstractWe consider a game in coalitional form played by the firms of a Cournot industry and an outside patent holder of a cost-reducing innovation. The worth of a coalition of players is the total Cournot profit of the active firms within this coalition. The number of firms that a coalition activates is determined by the Nash equilibrium of the game played by the coalition and its complement, where the strategy of each is the number of firms to be activated. Only firms in a coalition containing the patent holder are allowed to use the new technology. We prove that when the industry size increases indefinitely, the Shapley value of the patent holder approximates the payoff he obtains in a standard non-cooperative setup where he has the entire bargaining power. We also examine a partition game which considers for every coalition all structures of its complement, namely all partitions of the complement into sub-coalitions. The coalition and every sub-coalition of the complement simultaneously decide how many of their firms to be activated. We prove a similar equivalence result for an extension of the Shapley value from coalitional games to partition games.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Mathematical Social Sciences.
Volume (Year): 58 (2009)
Issue (Month): 1 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505565
Game theory Patent licensing Shapley value;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Geoffroy de Clippel & Roberto Serrano, 2005.
"Marginal Contributions and Externalities in the Value,"
2005-11, Brown University, Department of Economics.
- Geoffroy de Clippel & Roberto Serrano, 2008. "Marginal Contributions and Externalities in the Value," Econometrica, Econometric Society, vol. 76(6), pages 1413-1436, November.
- Geoffroy de Clippel & Roberto Serrano, 2005. "Marginal Contributions And Externalities In The Value," Economics Working Papers we057339, Universidad Carlos III, Departamento de Economía.
- Geoffroy de Clippel & Roberto Serrano, 2007. "Marginal contributions and externalities in the value," Working Papers 2007-04, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
- Katz, Michael L & Shapiro, Carl, 1986. "How to License Intangible Property," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 567-89, August.
- Kamien, Morton I & Tauman, Yair, 1986. "Fees versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 471-91, August.
- Bolger, E M, 1989. "A Set of Axioms for a Value for Partition Function Games," International Journal of Game Theory, Springer, vol. 18(1), pages 37-44.
- Navarro, Noemi, 2007. "Fair allocation in networks with externalities," Games and Economic Behavior, Elsevier, vol. 58(2), pages 354-364, February.
- Debapriya Sen & Yair Tauman, 2002.
"General licensing schemes for a cost-reducing innovation,"
Department of Economics Working Papers
02-03, Stony Brook University, Department of Economics.
- Sen, Debapriya & Tauman, Yair, 2007. "General licensing schemes for a cost-reducing innovation," Games and Economic Behavior, Elsevier, vol. 59(1), pages 163-186, April.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Can Erutku & Yves Richelle, 2007. "Optimal Licensing Contracts and the Value of a Patent," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 407-436, 06.
- Macho-Stadler, Ines & Perez-Castrillo, David & Wettstein, David, 2007. "Sharing the surplus: An extension of the Shapley value for environments with externalities," Journal of Economic Theory, Elsevier, vol. 135(1), pages 339-356, July.
- Kamien, Morton I. & Tauman, Yair & Zamir, Shmuel, 1990. "On the value of information in a strategic conflict," Games and Economic Behavior, Elsevier, vol. 2(2), pages 129-153, June.
- Yair Tauman & Naoki Watanabe, 2007. "The Shapley Value of a Patent Licensing Game: the Asymptotic Equivalence to Non-cooperative Results," Economic Theory, Springer, vol. 30(1), pages 135-149, January.
- Kamien, Morton I., 1992. "Patent licensing," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 11, pages 331-354 Elsevier.
- Yair Tauman & Debrapiya Sen, 2012. "Patents and Licenses," Department of Economics Working Papers 12-05, Stony Brook University, Department of Economics.
- Eric Bahel & Christian Trudeau, 2013.
"A discrete cost sharing model with technological cooperation,"
International Journal of Game Theory,
Springer, vol. 42(2), pages 439-460, May.
- Eric Bahel & Christian Trudeau, 2011. "A Discrete Cost Sharing Model with Technological Cooperation," Working Papers e07-28, Virginia Polytechnic Institute and State University, Department of Economics.
- BHATTACHARYA, Sudipto & D’ASPREMONT, Claude & GURIEV, Sergei & SEN, Debapriya, 2012. "Cooperation in R&D: patenting, licensing and contracting," CORE Discussion Papers 2012055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Kishimoto, Shin & Watanabe, Naoki & Muto, Shigeo, 2011. "Bargaining outcomes in patent licensing: Asymptotic results in a general Cournot market," Mathematical Social Sciences, Elsevier, vol. 61(2), pages 114-123, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.