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Bargaining with a Property Rights Owner

Author

Listed:
  • Yair Tauman

    (Tel Aviv University and Stony Brook University)

  • Andriy Zapechelnyuk

    () (Kyiv School of Economics)

Abstract

We consider a bargaining problem where one of the players, the intellectual property rights owner (IPRO) can allocate licenses for the use of this property among the interested parties (agents). The agents negotiate with him the allocation of licenses and the payments of the licensees to the IPRO. We state five axioms and characterize the bargaining solutions which satisfy these axioms. Every solution is characterized by a fraction a. Every agent obtains a weighted average of his individually rational level and his marginal contribution to the set of all players, where the weights are a and 1-a, respectively, uniformly over all bargaining problems. The IPRO obtains the remaing surplus. The solution for a=1/2 is the nucleolus of a naturally related game in characteristic form.

Suggested Citation

  • Yair Tauman & Andriy Zapechelnyuk, 2008. "Bargaining with a Property Rights Owner," Discussion Papers 1, Kyiv School of Economics.
  • Handle: RePEc:kse:dpaper:1
    Note: Forthcoming in Games and Economic Behavior
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    File URL: http://repec.kse.org.ua/pdf/KSE_dp1.pdf
    File Function: Revised version, April 2008
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    References listed on IDEAS

    as
    1. Sen, Debapriya & Tauman, Yair, 2007. "General licensing schemes for a cost-reducing innovation," Games and Economic Behavior, Elsevier, vol. 59(1), pages 163-186, April.
    2. Buch, Ishay & Tauman, Yair, 1992. "Bargaining with a Ruler," International Journal of Game Theory, Springer;Game Theory Society, vol. 21(2), pages 131-148.
    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    4. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
    5. Kamien, Morton I & Tauman, Yair, 2002. "Patent Licensing: The Inside Story," Manchester School, University of Manchester, vol. 70(1), pages 7-15, January.
    6. 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.
    7. Kamien, Morton I. & Tauman, Yair & Zamir, Shmuel, 1990. "On the value of information in a strategic conflict," Games and Economic Behavior, Elsevier, vol. 2(2), pages 129-153, June.
    8. Yair Tauman & Naoki Watanabe, 2007. "The Shapley Value of a Patent Licensing Game: the Asymptotic Equivalence to Non-cooperative Results," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(1), pages 135-149, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Bargaining solution; nucleolus; licensing; property rights;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing

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