Licensing in a Vertically Separated Industry
AbstractThe literature on technology licensing has ignored the importance of market power of the input supplier. In this paper we examine the impact of licensing in the downstream industry when the firms in the upstream industry have market power. We show that licensing in the downstream industry can make the upstream industry more competitive. However, licensing in the downstream industry is profitable if and only if licensing changes the concentration in the upstream industry. We also show that a monopolist in the final goods market has the incentive for licensing if licensing changes the market structure of the upstream industry.
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Bibliographic InfoPaper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2002/09.
Length: 21 pages
Date of creation: Sep 2002
Date of revision:
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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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