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Optimal Licensing in a Spatial Model

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • CABALLERO-SANZ, Francisco & MONER-COLONQUES, Rafael & SEMPERE-MONERRIS, J.J., 1994. "Optimal Licensing in a Spatial Model," CORE Discussion Papers 1994031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1994031
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-1994.html
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    Cited by:

    1. Lemarié, S., 2005. "Vertical integration and the licensing of innovation with a fixed fee or a royalty," Working Papers 200517, Grenoble Applied Economics Laboratory (GAEL).
    2. 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.
    3. Meniere, Yann & Parlane, Sarah, 2010. "Decentralized licensing of complementary patents: Comparing the royalty, fixed-fee and two-part tariff regimes," Information Economics and Policy, Elsevier, vol. 22(2), pages 178-191, May.
    4. Ana Mauleon & Vincent Vannetelbosch & Cecilia Vergari, 2013. "Bargaining and delay in patent licensing," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(4), pages 279-302, December.
    5. PARLANE, Sarah & MENIERE, Yann, 2006. "Licensing a standard: fixed fee versus royalty," CORE Discussion Papers 2006116, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Bouguezzi, Fehmi & EL ELJ, Moez, 2009. "Vertical Integration and Patent Licensing in Upstream and Downstream Markets," MPRA Paper 22212, University Library of Munich, Germany.
    7. Amir, Rabah & Encaoua, David & Lefouili, Yassine, 2014. "Optimal licensing of uncertain patents in the shadow of litigation," Games and Economic Behavior, Elsevier, vol. 88(C), pages 320-338.
    8. Ménière, Yann & Parlane, Sarah, 2008. "Decentralized of licensing of complementary patents: comparing royalty, fixed fee and two part tariff," PIE/CIS Discussion Paper 383, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.

    More about this item

    Keywords

    licensing; royalties; fees; exclusive territories;

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