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Stable bargaining outcomes in patent licensing: A cooperative game approach without side payments

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  • Kishimoto, Shin

Abstract

By formulating negotiations about licensing payments as cooperative games without side payments, we investigate stable bargaining outcomes in licensing a cost-reducing technology of an external patent holder to oligopolistic firms producing a homogeneous product under two policies: fee and royalty. The final bargaining outcome in fee licensing is uniquely determined, because the bargaining set for a coalition structure in which the patent holder can gain the maximum profit is a singleton. Under the royalty policy, the non-empty core for a coalition structure suggests that the patent holder should license his patented technology to all firms. Moreover, royalty licensing may be superior to fee licensing for the patent holder, when licensing is carried out through bargaining.

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  • Kishimoto, Shin, 2013. "Stable bargaining outcomes in patent licensing: A cooperative game approach without side payments," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 183-195.
    • Handle: RePEc:eee:matsoc:v:66:y:2013:i:3:p:183-195
    DOI: 10.1016/j.mathsocsci.2013.05.002
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    References listed on IDEAS

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    1. Sen, Debapriya & Tauman, Yair, 2007. "General licensing schemes for a cost-reducing innovation," Games and Economic Behavior, Elsevier, vol. 59(1), pages 163-186, April.
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    1. Hirai, Toshiyuki & Watanabe, Naoki & Muto, Shigeo, 2019. "Farsighted stability in patent licensing: An abstract game approach," Games and Economic Behavior, Elsevier, vol. 118(C), pages 141-160.
    2. Hirai, Toshiyuki & Watanabe, Naoki, 2018. "von Neumann–Morgenstern stable sets of a patent licensing game: The existence proof," Mathematical Social Sciences, Elsevier, vol. 94(C), pages 1-12.

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