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Optimal Licensing in a Spatial Model

  • CABALLERO-SANZ, Francisco

    (University of Valencia and Commission of the European Communities, Directorate General for Competition)

  • MONER-COLONQUES, Rafael

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

  • SEMPERE-MONERRIS, J.J.

    (CORE and IRES Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

This paper studies, in a spatial model. optimal licensing policies by first, comparing our results with the standard (non-spatial) licensing literature, and second, how results are affected if the patent holder can introduce a vertical restraint (exclusive territories). Contrary to standard results we find that royalties are superior to fees. Once the licensor introduces an ET clause, his profits are higher than when he uses either fees or royalties only. A conflict between private and social interests arises since consumers are better off when the technology is licensed via fees.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1994031.

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Date of creation: 01 Jul 1994
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Handle: RePEc:cor:louvco:1994031
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