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Classroom experiments on technology licensing: Royalty stacking, cross-licensing, and patent pools

Author

Listed:
  • Atle Haugen
  • Steffen Juranek

Abstract

The authors present two classroom experiments on technology licensing. The first classroom experiment introduces the concept of royalty stacking. Students learn that noncooperative pricing of royalties for complementary intellectual property rights leads to a double-marginalization effect. Cooperation solves the problem and is welfare-improving. The second classroom experiment introduces students to cross-licensing. It shows that reciprocal royalty payments dampen competition. The classroom experiments stimulate discussions of technology licensing, intellectual property rights, different royalty structures, patent pools, and technology standards. The authors present the experimental procedures and suggest routes for the discussion.

Suggested Citation

  • Atle Haugen & Steffen Juranek, 2023. "Classroom experiments on technology licensing: Royalty stacking, cross-licensing, and patent pools," The Journal of Economic Education, Taylor & Francis Journals, vol. 54(2), pages 113-125, April.
    • Handle: RePEc:taf:jeduce:v:54:y:2023:i:2:p:113-125
    DOI: 10.1080/00220485.2023.2177220
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    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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