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Abuse of dominance and licensing of intellectual property

  • Rey, Patrick
  • Salant, David

We examine the impact of the licensing policies of one or more upstream owners of essential intellectual property (IP hereafter) on the variety offered by a downstream industry, as well as on consumers and social welfare. When an upstream IP monopoly increases the number of licenses, it enhances product variety, adding to consumer value, but it also intensifies downstream competition, and thus dissipates profits. As a result, the upstream IP monopoly may want to provide too many or too few licenses relative to what maximizes consumer surplus or social welfare.

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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 30 (2012)
Issue (Month): 6 ()
Pages: 518-527

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Handle: RePEc:eee:indorg:v:30:y:2012:i:6:p:518-527
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505551

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