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A Cross-Licensing System Discourages R&D Investments In Completely Complementary Technologies

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Author Info
Makoto Okamura (Hiroshima University)
Testuya Shinkai () (Kwansei Gakuin University)
Satoru Tanaka (Kobe City University of Foreign Studies)

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Abstract

We 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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File URL: http://192.218.163.163/RePEc/pdf/kgdp27.pdf
File Format: application/pdf
File Function: First version, 2005
Download Restriction: no

Publisher Info
Paper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 27.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 27 pages
Date of creation: Sep 2005
Date of revision: Sep 2005
Handle: RePEc:kgu:wpaper:27

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Related research
Keywords: 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 - - - Management of Technological Innovation and R&D

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