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Formation of a Pool with Essential Patents

Author

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  • Aoki, Reiko
  • 青木, 玲子
  • アオキ, レイコ
  • Nagaoka, Sadao
  • 長岡, 貞男
  • ナガオカ, サダオ

Abstract

We examine why cooperation among essential patent holders may not occur, despite significant gains for them and the users. We use the sequential coalition formation framework to show that no coalition may form when the number of patent holders is large, if a firm initiating the coalition can negotiate only sequentially and individually with the rest. Our results, complementing Ray and Vohra (1999) suggest that voluntary sequential negotiation cannot prevent the emergence of "tragedy of anticommons", even if side payments are allowed.

Suggested Citation

  • Aoki, Reiko & 青木, 玲子 & アオキ, レイコ & Nagaoka, Sadao & 長岡, 貞男 & ナガオカ, サダオ, 2007. "Formation of a Pool with Essential Patents," Discussion Paper 326, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:piedp2:326
    Note: September 2006
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/14543/pie_dp326.pdf
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    References listed on IDEAS

    as
    1. Priest, George L, 1977. "Cartels and Patent License Arrangements," Journal of Law and Economics, University of Chicago Press, vol. 20(2), pages 309-377, October.
    2. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters, in: Innovation Policy and the Economy, Volume 1, pages 119-150, National Bureau of Economic Research, Inc.
    3. Aoki, Reiko & Nagaoka, Sadao, 2004. "The Consortium Standard and Patent Pools," Economic Review, Hitotsubashi University, vol. 55(4), pages 345-357, October.
    4. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
    5. Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
    6. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-1064, July.
    7. Aoki, Reiko & 青木, 玲子 & Nagaoka, Sadao & 長岡, 貞男, 2005. "Coalition Formation for a Consortium Standard Through a Standard Body and a Patent Pool: Theory and Evidence from MPEG2, DVD and 3G," IIR Working Paper 05-01, Institute of Innovation Research, Hitotsubashi University.
    8. Carlo Carraro (ed.), 2003. "The Endogenous Formation of Economic Coalitions," Books, Edward Elgar Publishing, number 2999.
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    Cited by:

    1. Jay Pil Choi & Heiko Gerlach, 2015. "Patent pools, litigation, and innovation," RAND Journal of Economics, RAND Corporation, vol. 46(3), pages 499-523, September.
    2. Akifumi Ishihara & Noriyuki Yanagawa, 2013. "Dark Sides of Patent Pools with Compulsory Independent Licensing," CARF F-Series CARF-F-318, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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