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Technology licensing in mixed oligopoly

Author

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  • Chen, Yi-Wen
  • Yang, Ya-Po
  • Wang, Leonard F.S.
  • Wu, Shih-Jye

Abstract

We develop a mixed oligopoly model with one public firm and two private firms to explore the licensing strategy considered by the innovated private firm. The major findings of our paper are that: firstly, if the patentee licenses the public firm under some plausible parametric range, the public firm will not accept the technology licensing offer from the private firm; secondly, if the public firm accepts the licensing, all of the three different types of licensing contracts (royalty, fixed-fee and two-part tariff) can be the same optimal licensing contracts; thirdly, if the patentee licenses to another private firm, fixed-fee licensing will be the optimal choice for the patentee; finally, licensing to the public firm and another private firm simultaneously is not the best strategy for the patentee when the original cost difference between public and private firms is large. Our results are quite different from the previous on the licensing strategy among private firms.

Suggested Citation

  • Chen, Yi-Wen & Yang, Ya-Po & Wang, Leonard F.S. & Wu, Shih-Jye, 2014. "Technology licensing in mixed oligopoly," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 193-204.
    • Handle: RePEc:eee:reveco:v:31:y:2014:i:c:p:193-204
    DOI: 10.1016/j.iref.2014.02.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Mixed oligopoly; Technology licensing; Unit royalty; Fixed fee;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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