Patent Licensing from High-Cost Firm to Low-Cost Firm
AbstractIn the literature of patent licensing, most of the studies are done where new technology is transferred from a cost-efficient firm (patentee) to a less efficient firm (licensee). However, R&D intensive firms are usually based in high wage countries whereas the cost-efficient firms are based in low wage countries. As a result R&D intensive firms are not necessarily the most cost -efficient firms in the industry, although in most cases they are the patentee firms. Given this backdrop, we study a situation of patent licensing where the technology transfer takes place from an innovative firm, which is relatively inefficient in terms of cost of production to its cost-efficient rival. We look for optimal licensing arrangements in this environment. This framework also provides a platform to bridge the literature on external and internal patentees.
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Bibliographic InfoPaper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0503.
Date of creation: 2005
Date of revision:
licensing; fixed fee; royalty; two-part tariff; quantity competition; Innovation;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-03 (All new papers)
- NEP-COM-2005-04-03 (Industrial Competition)
- NEP-INO-2005-04-03 (Innovation)
- NEP-MIC-2005-04-03 (Microeconomics)
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