Trademark Licensing in a Monopolistically Competitive Industry
AbstractThis article examines the efficacy of intrabrand rivalry in a monopolistically competitive industry. Intrabrand rivalry through trademark licensing would result in lower prices for consumers, but would also reduce product diversity because all brands would be less profitable. Using both the constant elasticity of substitution and the spatial models of product differentiation, we find that when fixed costs are specific to each firm, the welfare losses on product diversity dominate the welfare gains from lower prices, and consumer surplus declines. Under certain circumstances, however, trademark licensing can increase welfare when fixed costs are specific to each brand and can thus be shared among the licensed firms.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 17 (1986)
Issue (Month): 2 (Summer)
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- Christine Greenhalgh & Mark Rogers, 2007.
"Trade Marks and Performance in UK Firms: Evidence of Schumpeterian Competition through Innovation,"
Economics Series Working Papers, University of Oxford, Department of Economics
300, University of Oxford, Department of Economics.
- Christine Greenhalgh & Mark Rogers, 2006. "Trade Marks and Performance in UK Firms: Evidence of Schumpeterian Competition through Innovation," Discussion Papers, Stanford Institute for Economic Policy Research 06-034, Stanford Institute for Economic Policy Research.
- Graevenitz, Georg von, 2007. "Which Reputations Does a Brand Owner Need? Evidence from Trade Mark Opposition," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University 215, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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