This article investigates the optimal licensing mechanism in a spatial model where competitors set quantities and one firm owns a cost-reducing innovation. We show that when the firms spatially discriminate, the innovator gets higher profits by licensing through royalties instead than through a fixed fee, whereas in the case of uniform delivered quantities the innovator prefers licensing by royalties (fixed fee) if and only if it has not (has) a sufficiently strong locational disadvantage with respect to the potential licensee.
Colombo, S., Fee versus royalty licensing in spatial Cournot competition, <<THE ANNALS OF REGIONAL SCIENCE>>, 2014; (N/A): 859-879. [doi:10.1007/s00168-014-0614-4] [http://hdl.handle.net/10807/61787]
Fee versus royalty licensing in spatial Cournot competition
Colombo, Stefano
2014
Abstract
This article investigates the optimal licensing mechanism in a spatial model where competitors set quantities and one firm owns a cost-reducing innovation. We show that when the firms spatially discriminate, the innovator gets higher profits by licensing through royalties instead than through a fixed fee, whereas in the case of uniform delivered quantities the innovator prefers licensing by royalties (fixed fee) if and only if it has not (has) a sufficiently strong locational disadvantage with respect to the potential licensee.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.