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Patent Licensing and Technological Catch-Up in a Heterogeneous Duopoly

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  • Bruno D. Badia

    (Rhodes College)

Abstract

A cost-reducing innovation is available to Cournot duopolists through licensing. The firms are ex ante heterogeneous and adoption of the innovation impacts them differently. Is it possible for the inefficient duopolist to catch up with its efficient rival? Under certain conditions, yes. The conditions, however, are stringent: It is not sufficient, for instance, that the innovation promotes a change in the efficiency rank of the firms.

Suggested Citation

  • Bruno D. Badia, 2019. "Patent Licensing and Technological Catch-Up in a Heterogeneous Duopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(2), pages 287-300, September.
    • Handle: RePEc:kap:revind:v:55:y:2019:i:2:d:10.1007_s11151-018-09675-1
    DOI: 10.1007/s11151-018-09675-1
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    Cited by:

    1. Luca Sandrini, 2023. "Price vs Market Share with Royalty Licensing: Incomplete Adoption of a Superior Technology with Heterogeneous Firms," Discussion Papers 2302, Budapest University of Technology and Economics, Quantitative Social and Management Sciences.
    2. H. Phoebe Chan, 2022. "The Welfare Effects of Licensing Product-Differentiating Technology in a Commodity Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 491-510, June.

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