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How to license a public licensor's technology to an asymmetric duopoly


  • Takeshi Ebina
  • Shin Kishimoto


We consider the issue of optimal licensing from the viewpoint of an external public licensor maximizing social welfare. Our principal findings are as follows. Fee licensing is always at least as good as royalty licensing for the public licensor. For small innovations, there exists a subgame perfect equilibrium outcome in which the public licensor licenses his patented technology to only an efficient (low-cost) firm maximizing its profit.

Suggested Citation

  • Takeshi Ebina & Shin Kishimoto, 2012. "How to license a public licensor's technology to an asymmetric duopoly," Economics and Business Letters, Oviedo University Press, vol. 1(2), pages 16-26.
  • Handle: RePEc:ove:journl:aid:9401

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    References listed on IDEAS

    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.
    2. Morton I. Kamien & Yair Tauman, 1986. "Fees Versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, Oxford University Press, vol. 101(3), pages 471-491.
    3. Can Erutku & Yves Richelle, 2007. "Optimal Licensing Contracts and the Value of a Patent," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 407-436, June.
    4. X. Henry Wang & Bill Yang, 2004. "On Technology Transfer to an Asymmetric Cournot Duopoly," Economics Bulletin, AccessEcon, vol. 4(14), pages 1-6.
    5. repec:ebl:ecbull:v:4:y:2004:i:14:p:1-6 is not listed on IDEAS
    6. Giebe, Thomas & Wolfstetter, Elmar, 2008. "License auctions with royalty contracts for (winners and) losers," Games and Economic Behavior, Elsevier, vol. 63(1), pages 91-106, May.
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