To Merge or to License: Implications for Competition Policy
The optimal merger policy when efficiency gains are not merger specific but can also be achieved through licensing is derived in a differentiated goods Cournot duopoly. We show that whenever both royalties and fees are feasible instruments to license technology, mergers should not be allowed, which fits the prescription of the U.S. Horizontal Merger Guidelines. When only one instrument is feasible, however, the possibility of licensing cannot be used as a definitive argument against mergers.
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"The role of information in licensing contract design,"
Elsevier, vol. 25(1), pages 43-57, January.
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"Horizontal Mergers: An Equilibrium Analysis,"
Department of Economics, Working Paper Series
qt0tp305nx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
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- Muto Shigeo, 1993. "On Licensing Policies in Bertrand Competition," Games and Economic Behavior, Elsevier, vol. 5(2), pages 257-267, April.
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- Tarun Khanna & Bharat N. Anand, 1996. "Intellectual Property Rights and Contract Structure," Yale School of Management Working Papers ysm37, Yale School of Management.
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