Technology transfer in a linear city with symmetric locations
AbstractThis paper compares patent licensing regimes in a Hotelling model where firms are located symmetrically and not necessary at the end points of the city. I suppose that one of the firms owns a process innovation reducing the marginal unit cost. This patent holding firm will decide to sell a license or not to the non innovative firm and will choose, when licensing, between a fixed fee or a royalty. The key difference between this paper and other papers is that here I suppose that firms are not static and can move along the linear city symmetrically. I find that when there is no licensing, Nash equilibrium exists only when innovation is non drastic. I also find that royalties licensing is better than fixed fee licensing when innovation is small. When the innovation is intermediate I find that fixed fee is better than a royalty. The paper shows that a fixed fee is not better than a non licensing regime independently of the innovation size and the optimal licensing regime is royalties when innovation is small. Finally, I show that a patent holding firm should not license its innovation when it is intermediate or drastic
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 21055.
Date of creation: 2010
Date of revision:
Hotelling model; Technology transfer; Patent licensing;
Find related papers by JEL classification:
- L0 - Industrial Organization - - General
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-13 (All new papers)
- NEP-GEO-2010-03-13 (Economic Geography)
- NEP-INO-2010-03-13 (Innovation)
- NEP-IPR-2010-03-13 (Intellectual Property Rights)
- NEP-MIC-2010-03-13 (Microeconomics)
- NEP-TID-2010-03-13 (Technology & Industrial Dynamics)
- NEP-URE-2010-03-13 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wang, X. Henry, 1998. "Fee versus royalty licensing in a Cournot duopoly model," Economics Letters, Elsevier, vol. 60(1), pages 55-62, July.
- Van Long, N. & Soubeyran, A., 1996.
"R&D Spillovers and Location Choice Under Cournot Rivalry,"
96a35, Universite Aix-Marseille III.
- Ngo Van Long & Antoine Soubeyran, 1996. "R&D Spillovers and Location Choice under Cournot Rivalry," CIRANO Working Papers 96s-30, CIRANO.
- Caroline Hussler & Andre Lorentz & Patrick Ronde, 2007. "Agglomeration and Endogenous Absorptive Capacities: Hotelling Revisited," Jena Economic Research Papers 2007-102, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Henry Wang, X., 2002. "Fee versus royalty licensing in a differentiated Cournot duopoly," Journal of Economics and Business, Elsevier, vol. 54(2), pages 253-266.
- Mai, Chao-cheng & Peng, Shin-kun, 1999. "Cooperation vs. competition in a spatial model," Regional Science and Urban Economics, Elsevier, vol. 29(4), pages 463-472, July.
- Bouguezzi, Fehmi, 2010. "Transfert de technologie dans une ville carrée à deux dimensions avec cout de transport quadratique," MPRA Paper 23158, University Library of Munich, Germany.
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