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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)

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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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Publisher 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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  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. [Downloadable!]
  2. Clark, Derek J. & Foros, Øystein & Sand, Jan Yngve, 2009. "Foreclosure in contests," Discussion Papers 2008/27, Department of Finance and Management Science, Norwegian School of Economics and Business Administration. [Downloadable!]
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This page was last updated on 2009-11-29.

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