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Free licensing to boost aggregate odds for success

  • Sorek, Gilad

We show how technological leader gains from inviting an entrant into R&D competition to improve over existing patented technology, as the entrant takes complementary R&D effort, and the demand for both current and improved technologies is increasing with aggregate probability for successful quality improvement.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165176512000535
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 116 (2012)
Issue (Month): 2 ()
Pages: 183-185

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Handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:183-185
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Ted O'Donoghue & Suzanne Scotchmer & Jacques-Fran├žois Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, 03.
  2. Farrell, Joseph & Gallini, Nancy T., 1986. "Second-sourcing as a Commitment: Monopoly Incentives to Attract Competition," Department of Economics, Working Paper Series qt8zs1p5cc, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  3. James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Imitation," Economics Working Papers 0025, Institute for Advanced Study, School of Social Science.
  4. Gallini, Nancy T, 1984. "Deterrence by Market Sharing: A Strategic Incentive for Licensing," American Economic Review, American Economic Association, vol. 74(5), pages 931-41, December.
  5. Andrea Shepard, 1987. "Licensing to Enhance Demand for New Technologies," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 360-368, Autumn.
  6. Katharine E. Rockett, 1990. "Choosing the Competition and Patent Licensing," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 161-171, Spring.
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