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Licensing with capacity constraint

Author

Listed:
  • Colombo, Stefano
  • Filippini, Luigi
  • Sen, Debapriya

Abstract

We consider a patent licensing game with a capacity constrained innovator. We show that when the constraint is strong (weak), the patentee prefers licensing by means of a fixed fee (unit royalty). In the case of a two-part tariff, the innovator charges a positive fixed fee if and only if the constraint is strong enough.

Suggested Citation

  • Colombo, Stefano & Filippini, Luigi & Sen, Debapriya, 2020. "Licensing with capacity constraint," MPRA Paper 102653, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102653
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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. Debapriya Sen & Giorgos Stamatopoulos, 2009. "Technology Transfer Under Returns To Scale," Manchester School, University of Manchester, vol. 77(3), pages 337-365, June.
    3. repec:ebl:ecbull:v:12:y:2008:i:5:p:1-7 is not listed on IDEAS
    4. Matt Marx & Joshua S. Gans & David H. Hsu, 2014. "Dynamic Commercialization Strategies for Disruptive Technologies: Evidence from the Speech Recognition Industry," Management Science, INFORMS, vol. 60(12), pages 3103-3123, December.
    5. Sen, Debapriya & Stamatopoulos, Giorgos, 2016. "Licensing under general demand and cost functions," European Journal of Operational Research, Elsevier, vol. 253(3), pages 673-680.
    6. Marco Alderighi, 2008. "On the Optimality of Patent Licensing with Maximum Production Volume," Economics Bulletin, AccessEcon, vol. 12(5), pages 1-7.
    7. Morton I. Kamien & Yair Tauman, 1986. "Fees Versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 471-491.
    8. Wang, X. Henry, 1998. "Fee versus royalty licensing in a Cournot duopoly model," Economics Letters, Elsevier, vol. 60(1), pages 55-62, July.
    9. Debapriya Sen & Giorgos Stamatopoulos, 2019. "Decreasing Returns, Patent Licensing, and Price-Reducing Taxes," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 175(2), pages 291-307.
    10. Oecd, 2004. "Patents and Innovation: Trends and Policy Challenges," Levine's Working Paper Archive 122247000000000502, David K. Levine.
    11. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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