Merging to License: Internal vs. External Patentee

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Merging to License: Internal vs. External Patentee

Author Info

Joel Sandonís () (Departamento de Fundamentos del Análisis Económico II, Universidad del Pais Vasco, Spain)
Ramon Faulí-Oller () (Departamento de Fundamentos del Análisis Económico, Universidad de Alicante, Spain)

Abstract

In this paper, we endogenize the decision of a research laboratory that owns a patented process innovation on whether to remain independent as an external patentee or to merge with a manufacturing firm, becoming an internal to the industry patentee. We show that a merger is profitable only for the case of small innovations whereas only large innovations make it welfare improving. As a consequence, the antitrust authority should forbid all (profitable) mergers.

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Publisher Info
Paper provided by Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística) in its series BILTOKI with number 200306.

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Date of creation: 23 Apr 2003
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Handle: RePEc:ehu:biltok:200306

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Postal: Dpto. de Econometría y Estadística, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-04-27 (All new papers)
NEP-COM-2003-04-27 (Industrial Competition)
NEP-IND-2003-04-27 (Industrial Organization)

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This page was last updated on 2009-11-20.

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