We consider the problem of patent licensing in a Cournot duopoly in which the innovator (patentee) is one of the firms and it is capacity constrained. We show that when the patentee can produce a relatively small (relatively large) quantity, it prefers licensing by means of a fixed fee (unit royalty). When the patentee can set two-part tariffs in the form of combinations of fixed fees and unit royalties, it charges a positive fixed fee if and only if it is limited to producing a relatively small quantity. We also show that with combinations of fixed fees and royalties, the royalty rate is lower than is true for the standard case.

Colombo, S., Filippini, L., Sen, D., Patent Licensing and Capacity in a Cournot Model, <<REVIEW OF INDUSTRIAL ORGANIZATION>>, 2023; 62 (1): 45-62. [doi:10.1007/s11151-022-09886-7] [https://hdl.handle.net/10807/224228]

Patent Licensing and Capacity in a Cournot Model

Colombo, Stefano;Filippini, Luigi;
2023

Abstract

We consider the problem of patent licensing in a Cournot duopoly in which the innovator (patentee) is one of the firms and it is capacity constrained. We show that when the patentee can produce a relatively small (relatively large) quantity, it prefers licensing by means of a fixed fee (unit royalty). When the patentee can set two-part tariffs in the form of combinations of fixed fees and unit royalties, it charges a positive fixed fee if and only if it is limited to producing a relatively small quantity. We also show that with combinations of fixed fees and royalties, the royalty rate is lower than is true for the standard case.
2023
Inglese
Colombo, S., Filippini, L., Sen, D., Patent Licensing and Capacity in a Cournot Model, <<REVIEW OF INDUSTRIAL ORGANIZATION>>, 2023; 62 (1): 45-62. [doi:10.1007/s11151-022-09886-7] [https://hdl.handle.net/10807/224228]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/224228
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