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Licensing Cost-Reducing Innovations Under Supply Function Competition

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  • Saglam, Ismail

Abstract

In this paper, we study the problem of licensing cost-reducing innovations in a duopoly under supply function competition. We show that the innovator prefers fixed-fee licensing to no licensing if its cost advantage is not extremely large. Moreover, if its cost advantage is not extremely small, the innovator prefers fixed-fee licensing to royalty licensing, as well.

Suggested Citation

  • Saglam, Ismail, 2021. "Licensing Cost-Reducing Innovations Under Supply Function Competition," MPRA Paper 107293, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:107293
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    References listed on IDEAS

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    Cited by:

    1. Saglam, Ismail, 2022. "Monopoly Persistence under the Threat of Supply Function Competition," MPRA Paper 111829, University Library of Munich, Germany.
    2. Ihsan Celen & Ismail Saglam, 2022. "Collusion in supply functions under technology licensing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1362-1378, July.

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    More about this item

    Keywords

    Duopoly; licensing; supply function competition.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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