IDEAS home Printed from https://ideas.repec.org/a/rje/randje/v16y1985isummerp237-252.html
   My bibliography  Save this article

Licensing in the Theory of Innovation

Author

Listed:
  • Nancy T. Gallini
  • Ralph A. Winter

Abstract

This article analyzes licensing in a noncooperative R&D game. We ask two questions: What are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure? The gains from trading information through licensing contracts are achieved through the replacement of inefficient production techniques (the ex post incentive) and the elimination of inefficient research expenditures (the ex ante incentive). In a duopoly the availability of licensing encourages research when the firms' initial production technologies are close in costs and discourages research when initial costs are asymmetric.

Suggested Citation

  • Nancy T. Gallini & Ralph A. Winter, 1985. "Licensing in the Theory of Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 237-252, Summer.
  • Handle: RePEc:rje:randje:v:16:y:1985:i:summer:p:237-252
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0741-6261%28198522%2916%3A2%3C237%3ALITTOI%3E2.0.CO%3B2-C&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:16:y:1985:i:summer:p:237-252. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rje.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.