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Deal or No Deal? Licensing Negotiations in Standard-Setting Organizations

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  • Gilbert, Richard J.

Abstract

Technical standards benefit consumers and producers by facilitating productadoption, promoting compatible solutions, and helping to create anecosystem of products and services in which competition can thrive. However,standards also may create opportunities for the exercise of market power. Owners of patents with claims that are essential to a standard may “hold up†firms or consumers that are “locked-in†to a standard by charging high royalties for the use of products that comply with the standard. This licensor (or seller) market power3 arises “ex post,†i.e., after firms and consumers have made investments that are specific to the standard.

Suggested Citation

  • Gilbert, Richard J., 2011. "Deal or No Deal? Licensing Negotiations in Standard-Setting Organizations," Competition Policy Center, Working Paper Series qt6kv798tf, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  • Handle: RePEc:cdl:compol:qt6kv798tf
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    References listed on IDEAS

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    1. Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, January.
    2. Farrell, Joseph & Weiser, Philip, 2002. "Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Age of the Internet," Competition Policy Center, Working Paper Series qt0643v2vp, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    3. Farrell, Joseph & Katz, Michael L, 2000. "Innovation, Rent Extraction, and Integration in Systems Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 48(4), pages 413-432, December.
    4. Nicholas Economides & Lawrence J. White, 1995. "Access and Interconnection Pricing: How Efficient is the Efficient Component Pricing Rule?," Working Papers 95-04, New York University, Leonard N. Stern School of Business, Department of Economics.
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    Cited by:

    1. Jay Pil Choi, 2014. "FRAND Royalties and Injunctions for Standard Essential Patents," CESifo Working Paper Series 5012, CESifo Group Munich.
    2. Dennis Carlton & Bryan Keating, 2015. "Rethinking Antitrust in the Presence of Transaction Costs: Coasian Implications," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(4), pages 307-321, June.
    3. Hiroshi Kitamura & Noriaki Matsushima & Misato Sato, 2013. "How Does Downstream Firms' Efficiency Affect Exclusive Supply Agreements?," ISER Discussion Paper 0878r, Institute of Social and Economic Research, Osaka University, revised Sep 2015.
    4. Josh Lerner & Jean Tirole, 2015. "Standard-Essential Patents," Journal of Political Economy, University of Chicago Press, vol. 123(3), pages 547-586.
    5. repec:dpr:wpaper:0878 is not listed on IDEAS
    6. Miao, Chun-Hui, 2016. "Licensing a technology standard," International Journal of Industrial Organization, Elsevier, vol. 47(C), pages 33-61.

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    Business; Law; Social and Behavioral Sciences;

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