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- Title
Technology Licensing under Successive Monopoly.
- Authors
Shih, Pei-Cyuan; Chou, Tsung-Han; Hwang, Hong; Lin, Yan-Shu
- Abstract
Assume that there is an outside innovator who owns a cost-reducing innovation and the market structure of the industry in question is that of successive monopoly. It is found that, an innovation that is aimed at an upstream firm will tend to be accompanied by a fixed fee license, while an innovation that is aimed at a downstream firm will tend to be accompanied by a per-unit royalty license. But the former is reversed if the market structure of the final goods becomes duopolistic: The optimal licensing contract could never be that of fixed fee when licensing occurs at the upmost production stage. Moreover, the industry profit, consumer surplus and social welfare are all maximized when the licensing occurs at the upmost production stage.
- Subjects
MONOPOLIES; MARKET design &; structure (Economics); SOCIAL services; CONSUMERS' surplus; LICENSE fees; TECHNOLOGICAL innovations; TOTAL shoulder replacement
- Publication
Review of Industrial Organization, 2024, Vol 64, Issue 3, p327
- ISSN
0889-938X
- Publication type
Article
- DOI
10.1007/s11151-024-09951-3