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Licensing by a monopolist and unionized labor market

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  • Mukherjee, Soma
  • Broll, Udo
  • Mukherjee, Arijit

Abstract

We show that a monopolist final goods producer may find it profitable to create competition by licensing its technology if the input market is imperfectly competitive. With a centralized union, we show that licensing by a monopolist is profitable under both uniform and discriminatory wage settings by the union. However, the incentive for licensing is higher under the former situation. We also show that licensing by the monopolist is profitable under both quantity and price competition, and the incentive for licensing is higher under price competition than under quantity competition. Our qualitative results hold even with decentralized unions. --

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Bibliographic Info

Paper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 09/07.

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Date of creation: 2007
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Handle: RePEc:zbw:tuddps:0907

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Postal: 01062 Dresden
Phone: ++49 351 463 2196
Fax: ++49 351 463 7739
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Web page: http://www.tu-dresden.de/wiwi/
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Keywords: Licensing; Labor union; Price competition; Quantity competition;

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  19. Mukherjee, Arijit & Pennings, Enrico, 2006. "Tariffs, licensing and market structure," European Economic Review, Elsevier, vol. 50(7), pages 1699-1707, October.
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  24. Mukherjee, Arijit, 2005. "Price and quantity competition under free entry," Research in Economics, Elsevier, vol. 59(4), pages 335-344, December.
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