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Technology transfer with commitment

Author

Listed:
  • Arijit Mukherjee

    () (Technische Universiteit Eindhoven, Faculteit Technologie Management, Den Dolech 2, P.O.Box 513, 5600 MB Eindhoven, THE NETHERLANDS)

Abstract

This paper considers technology transfer in a duopoly where the firms have two types of commitment strategies: incentive delegation and capacity installation. It turns out that the possibility of technology transfer significantly differs under these two types of commitment as well as depending on whether one or both firms commit. Under strategic incentive delegation, the possibility of technology transfer is minimal when both firms use the incentive delegation strategy and the costs of incentive delegation are negligible. If both firms choose the incentive delegation strategy and the costs of incentive delegation are significant then the possibility of technology transfer rises compared to a situation with no pre-commitment. In case of commitment to a capacity level before production, the possibility of technology transfer does not change when both firms simultaneously commit to their capacity levels. Different sets of results arise when only one firm can pre-commit.

Suggested Citation

  • Arijit Mukherjee, 2001. "Technology transfer with commitment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 17(2), pages 345-369.
  • Handle: RePEc:spr:joecth:v:17:y:2001:i:2:p:345-369
    Note: Received: February 10, 1997; revised version: December 16, 1999
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    Citations

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    Cited by:

    1. Arijit Mukherjee, 2002. "R&D, Licensing and Patent Protection," Keele Economics Research Papers KERP 2002/01, Centre for Economic Research, Keele University.
    2. Arijit Mukherjee, 2002. "Licensing in a Vertically Separated Industry," Industrial Organization 0211005, EconWPA.
    3. Arijit Mukherjee & Soma Mukherjee, 2002. "Licensing and the Incentive for Innovation," Industrial Organization 0211008, EconWPA.
    4. repec:ebl:ecbull:v:4:y:2008:i:17:p:1-11 is not listed on IDEAS
    5. Toshihiro Matsumura & Noriaki Matsushima, 2010. "Patent licensing, bargaining, and product positioning," ISER Discussion Paper 0775, Institute of Social and Economic Research, Osaka University.
    6. Arijit Mukherjee, 2002. "Licensing under Asymmetric information," Keele Economics Research Papers KERP 2002/13, Centre for Economic Research, Keele University.
    7. 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.
    8. Arijit Mukherjee, 2002. "Capacity Commitment and Licensing," Industrial Organization 0211004, EconWPA.
    9. Marjit, Sugata & Beladi, Hamid & Kabiraj, Tarun, 2007. "Brand name collaboration and optimal tariff," Economic Modelling, Elsevier, vol. 24(4), pages 636-647, July.
    10. Aniruddha Bagchi & Arijit Mukherjee, 2011. "Commitment and excess capacity with licensing: an old debate with a new look," Journal of Economics, Springer, vol. 103(2), pages 133-147, June.
    11. Toshihiro Matsumura & Noriaki Matsushima & Giorgos Stamatopoulos, 2010. "Location equilibrium with asymmetric firms: the role of licensing," Journal of Economics, Springer, vol. 99(3), pages 267-276, April.
    12. Yair Tauman & Debrapiya Sen, 2012. "Patents and Licenses," Department of Economics Working Papers 12-05, Stony Brook University, Department of Economics.
    13. Dyuti Banerjee & Sugata Marjit, 2009. "Trade and technology transfer in a vertically differentiated industry," Journal of Economics, Springer, vol. 98(1), pages 67-75, September.
    14. Corchón, Luis C. & García, Clara Eugenia, 2005. "Technology transfer in oligopolistic markets with heterogeneous goods," UC3M Working papers. Economics we057036, Universidad Carlos III de Madrid. Departamento de Economía.

    More about this item

    Keywords

    Capacity installation; Incentive delegation; Technology licensing.;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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