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Whom to license patented technology

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Author Info

  • Sang-Seung Yi

    (Department of Economics, Sogang University, Seoul, Korea)

Abstract

This paper examines the optimal licensing policy of a patent holder when potential licensees differ in their capacities in absorbing the patented technology. If two-part tariffs with non-negative royalties and fixed fees are feasible, the patent holder finds it optimal to license the strong firm exclusively whether or not an exclusive licensing of the weak firm deters the strong firm from entering the market. Hence, the potential trade-offs between strategic gains associated with licensing to weak competitors and efficiency gains associated with licensing to efficient competitors do not exist when two part tariffs are available. © 1998 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 19 (1998)
Issue (Month): 3 ()
Pages: 189-195

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Handle: RePEc:wly:mgtdec:v:19:y:1998:i:3:p:189-195

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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Cited by:
  1. Soo Jeoung Sohn, 2006. "Choosing the partners in the licensing alliance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 251-260.
  2. Sharmila Vishwasrao, 2004. "Royalties vs. fees: How do firms pay for foreign technology?," Working Papers 04023, Department of Economics, College of Business, Florida Atlantic University, revised Sep 2006.
  3. Derek Clark & Øystein Foros & Jan Sand, 2011. "Foreclosure in contests," Public Choice, Springer, vol. 148(1), pages 215-232, July.

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