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Patent Licensing in Spatial Models

  • Yuanzhu Lu

    (China Economics and Management Academy, Central University of Finance and Economics, China)

  • Sougata Poddar

    (Department of Economics, Faculty of Business and Law, Auckland University of Technology)

We show that a two-part tariff licensing contract is always optimal to the insider patentee in spatial models irrespective of the size of the innovation or any pre-innovation cost asymmetries. The result provides a simple justification of the prevalence of two-part tariff licensing contracts in industries.

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File URL: http://www.aut.ac.nz/__data/assets/pdf_file/0003/399504/Economics-WP-2013-08.pdf
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Paper provided by Auckland University of Technology, Department of Economics in its series Working Papers with number 2013-08.

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Length: 11 pages
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:aut:wpaper:201308
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  1. Debapriya Sen & Yair Tauman, 2002. "General licensing schemes for a cost-reducing innovation," Department of Economics Working Papers 02-03, Stony Brook University, Department of Economics.
  2. Mukherjee, Arijit & Balasubramanian, N., 2001. "Technology transfer in a horizontally differentiated product market," Research in Economics, Elsevier, vol. 55(3), pages 257-274, September.
  3. Macho-Stadler, Ines & Martinez-Giralt, Xavier & David Perez-Castrillo, J., 1996. "The role of information in licensing contract design," Research Policy, Elsevier, vol. 25(1), pages 43-57, January.
  4. Kamien, Morton I., 1992. "Patent licensing," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 11, pages 331-354 Elsevier.
  5. Sougata Poddar & Uday Bhanu Sinha, 2010. "Patent Licensing from a High-Cost Firm to a Low-Cost Firm," The Economic Record, The Economic Society of Australia, vol. 86(274), pages 384-395, 09.
  6. Sougata Poddar & Uday Bhanu Sinha, 2002. "On Patent Licensing in Spatial Competition," Departmental Working Papers wp0212, National University of Singapore, Department of Economics.
  7. Toshihiro Matsumura & Noriaki Matsushima, 2007. "On patent licensing in spatial competition with endogenous location choice," Discussion Papers 2007-35, Kobe University, Graduate School of Business Administration.
  8. Fauli-Oller, Ramon & Sandonis, Joel, 2002. "Welfare reducing licensing," Games and Economic Behavior, Elsevier, vol. 41(2), pages 192-205, November.
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