Innovation, Licensing and Welfare
AbstractThis paper examines how the option for licensing affects research and development (R&D) and social welfare.We find that if cost reduction from R&D is sufficiently small and there is an option of licensing, firms will do non-cooperative R&D. In absence of licensing, firms will do cooperative R&D for sufficiently small cost reduction from R&D. Whether the option for licensing increases social welfare is ambiguous. If the possibility of licensing increases probability of success in R&D significantly then welfare is higher in presence of licensing.
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Bibliographic InfoPaper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2002/03.
Length: 20 pages
Date of creation: Feb 2002
Date of revision:
Publication status: Published in The Manchester School, Vol. 73, 2005 pages 29-39. [ doi:10.1111/j.1467-9957.2005.00422.x ]
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Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
Other versions of this item:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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