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Patent Licensing and Price Discrimination

Author

Listed:
  • Sandro Gleave

    (Federal Cartel Office, Germany)

  • Eberhard Feess

    (University of Aachen, Germany)

Abstract

We extend the Kamien and Tauman model of patent licensing by introducing heterogeneous licensees that differ in their marginal costs using the licensed technology. We show that price discrimination does not necessarily ensure an efficient allocation of licenses. Moreover, it is possible that more licenses are sold without rather than with price discrimination.

Suggested Citation

  • Sandro Gleave & Eberhard Feess, 2006. "Patent Licensing and Price Discrimination," Economics Bulletin, AccessEcon, vol. 4(10), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-05d40047
    as

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    File URL: http://www.accessecon.com/pubs/EB/2006/Volume4/EB-05D40047A.pdf
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    References listed on IDEAS

    as
    1. Morton I. Kamien & Yair Tauman, 1986. "Fees Versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 471-491.
    2. X. Henry Wang & Bill Yang, 2004. "On Technology Transfer to an Asymmetric Cournot Duopoly," Economics Bulletin, AccessEcon, vol. 4(14), pages 1-6.
    3. Wang, X. Henry, 1998. "Fee versus royalty licensing in a Cournot duopoly model," Economics Letters, Elsevier, vol. 60(1), pages 55-62, July.
    4. repec:ebl:ecbull:v:4:y:2004:i:14:p:1-6 is not listed on IDEAS
    5. Sen, Debapriya, 2005. "Fee versus royalty reconsidered," Games and Economic Behavior, Elsevier, vol. 53(1), pages 141-147, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Endogenous valuation;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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