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Bargaining outcomes in patent licensing: Asymptotic results in a general Cournot market

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  • Kishimoto, Shin
  • Watanabe, Naoki
  • Muto, Shigeo

Abstract

We study asymptotic bargaining outcomes in licensing a patented technology of an external patent holder to firms in a general Cournot market. Our results are as follows: when the number of firms is large, the bargaining set for each permissible coalition structure suggests that the patent holder should extract the entire profits of all licensees. The outcome that the bargaining finally reaches exactly coincides with the non-cooperative outcome, and it cannot be improved upon even by any objections with almost zero cost. Thus, it is strongly stable. The fair allocation represented by the Aumann-Drèze value is, however, not realized as such a stable bargaining outcome.

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Bibliographic Info

Article provided by Elsevier in its journal Mathematical Social Sciences.

Volume (Year): 61 (2011)
Issue (Month): 2 (March)
Pages: 114-123

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Handle: RePEc:eee:matsoc:v:61:y:2011:i:2:p:114-123

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Web page: http://www.elsevier.com/locate/inca/505565

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Keywords: Licensing Asymptotic result Coalition structure Bargaining set Aumann-Dreze value;

References

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  1. Kamien, Morton I. & Oren, Shmuel S. & Tauman, Yair, 1992. "Optimal licensing of cost-reducing innovation," Journal of Mathematical Economics, Elsevier, vol. 21(5), pages 483-508.
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  8. 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.
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Citations

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Cited by:
  1. 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).
  2. Hiroaki Ino, 2010. "Fee Versus Royalties in General Cost functions," Discussion Paper Series 65, School of Economics, Kwansei Gakuin University, revised Nov 2010.
  3. Kishimoto, Shin, 2013. "Stable bargaining outcomes in patent licensing: A cooperative game approach without side payments," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 183-195.

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