Decentralized of licensing of complementary patents: comparing royalty, fixed fee and two part tariff
AbstractThis paper analyzes how an inventor should fix the licensing terms to license a standard in complying with a non-discrimination requirement. Using a model incorporating imperfect competition between a finite number of users and product differentiation, we compare three different regimes: fixed fee (also known as royalty free), per unit royalty and two-part tariff. We highlight the different effects of each design on prices and number of varieties. We identify which one dominates with respect to the licensor's profit and total welfare. Finally we extend our model to a setting where the standard is protected by several licenses owned by non-cooperating owners.
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Bibliographic InfoPaper provided by Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University in its series PIE/CIS Discussion Paper with number 383.
Length: 21 p.
Date of creation: Jul 2008
Date of revision:
Note: June 13, 2008
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- Francisco CABALLERO-SANZ & Rafael MONER-COLONQUES & José J. SEMPERE-MONERRIS, 2002.
"Optimal Licensing in a Spatial Model,"
Annales d'Economie et de Statistique,
ENSAE, issue 66, pages 257-279.
- CABALLERO-SANZ, Francisco & MONER-COLONQUES, Rafael & SEMPERE-MONERRIS, José J., . "Optimal licensing in a spatial model," CORE Discussion Papers RP -1588, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- CABALLERO-SANZ, Francisco & MONER-COLONQUES, Rafael & SEMPERE-MONERRIS, J.J., 1994. "Optimal Licensing in a Spatial Model," CORE Discussion Papers 1994031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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