Licensing technology and foreclosure in contests

We consider an industry where one firm with a superior technology competes for market shares with several rivals. The owner of the superior technology (the dominant firm) can license or transfer the source of its dominance to a subset of rivals. Allowing the non-license takers to remain active in the market is a drain on the profit of the insiders, and we demonstrate that the dominant firm will only make a transfer of the superior technology if it can be used to foreclose some rival firms....