Publication: Licensing the market for technology
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Publication date
2003-10
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Publisher
Elsevier
Abstract
In technology-based industries, incumbent firm often license their technology to potential competitors.
Such a strategy is difficul to explain within traditional models of licensing. This paper
extends the literature on licensing by relaxing the assumption of a monopolist technology holder.
Competition in the market for technology induces licensing of innovations and incumbent firm
may fin it privately profitabl to license although their joint profit may well be higher in the
absence of any licensing. A strong testable implication of our model is that the number of licenses
per patent holder decreases with the degree of product differentiation.
Description
Keywords
Licensing, Market structure, Product differentiation
Bibliographic citation
Journal of Economic Behavior & Organization, 2003, v. 52, nº 2, pp. 277-295