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On the number of licenses under symmetric versus asymmetric information with signaling

Author

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  • Antelo, Manel
  • Sampayo, Antonio

Abstract

We analyze a two-period licensing game in which a non-producer upstream patent holder licenses an innovation to either one or two downstream licensees for a payment based on the licensee’s expected per-period profit. Licensees have private information about the innovation’s value, and their period-1 output may signal that value. We find that two licensees are more likely to be preferred under asymmetric information with signalling than under symmetric information.

Suggested Citation

  • Antelo, Manel & Sampayo, Antonio, 2014. "On the number of licenses under symmetric versus asymmetric information with signaling," MPRA Paper 60759, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60759
    as

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    File URL: https://mpra.ub.uni-muenchen.de/60759/1/MPRA_paper_60759.pdf
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    References listed on IDEAS

    as
    1. Schmitz, Patrick W., 2002. "On Monopolistic Licensing Strategies under Asymmetric Information," Journal of Economic Theory, Elsevier, vol. 106(1), pages 177-189, September.
    2. Schmitz, Patrick W., 2007. "Exclusive versus non-exclusive licensing strategies and moral hazard," Economics Letters, Elsevier, vol. 97(3), pages 208-214, December.
    3. Beggs, A. W., 1992. "The licensing of patents under asymmetric information," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 171-191, June.
    4. Manel Antelo, 2013. "Duration and payment of licensing contracts for users to reveal what they know," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(2), pages 127-151, March.
    5. Kamien, Morton I., 1992. "Patent licensing," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 11, pages 331-354, Elsevier.
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    Citations

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    Cited by:

    1. Yue Li & Takashi Yanagawa, 2021. "Fixed‐fee vs. royalty licensing under asymmetric demand information," Manchester School, University of Manchester, vol. 89(6), pages 640-657, December.
    2. Manel Antelo & Antonio Sampayo, 2017. "On the Number of Licenses with Signalling," Manchester School, University of Manchester, vol. 85(6), pages 635-660, December.

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    More about this item

    Keywords

    Licensing; symmetric and asymmetric information; profit-based payments; monopoly; duopoly;
    All these keywords.

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing

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