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How does a mixed ownership firm license a patent?

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  • Gelves, Juan Alejandro
  • Heywood, John S.

Abstract

This paper demonstrates that a cost disadvantaged innovator increasingly relies on licensing with a fixed fee as its public ownership share grows. Moreover, when the innovation is drastic, a cost disadvantaged innovator frequently licenses by fixed fee when it has a public share even as a fully private firm will never use a fixed fee. As the fixed fee improves welfare, these results suggest that the licensing method of a partial public firm helps correct the market failure of imperfect competition.

Suggested Citation

  • Gelves, Juan Alejandro & Heywood, John S., 2016. "How does a mixed ownership firm license a patent?," Economic Modelling, Elsevier, vol. 59(C), pages 278-284.
  • Handle: RePEc:eee:ecmode:v:59:y:2016:i:c:p:278-284
    DOI: 10.1016/j.econmod.2016.07.018
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    References listed on IDEAS

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    Keywords

    Cournot; Patent licensing; Mixed duopoly; Fixed fee; Royalty;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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