A Cross-Licensing System Discourages R&D Investments In Completely Complementary Technologies
AbstractWe consider the research and development (R&D) investment com petition of duopolistic firms in completely complementary technologies. By "completely complementary technologies," we mean that no firm can produce the goods without both of the technologies. We derive the investments competition equilibria in R&D of the two completely complementary technologies with and without a cross-licensing system. By comparing R&D investment levels in the two equilibria, we show that the cross-licensing system discourages the R&D invest ments when the duopolistic firms produce goods by using the two completely complementary technologies.
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Bibliographic InfoPaper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 27.
Length: 27 pages
Date of creation: Sep 2005
Date of revision: Sep 2005
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completely complementary technologies; cross-licensing system; R&D investments;
Find related papers by JEL classification:
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
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