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On the superiority of fixed fee over auction in asymmetric markets

It is well known that selling licenses for the use of a cost-reducing innovation by auction yields a higher revenue compared to fixed fee in a symmetric Cournot industry. In this note we show that this result can be reversed in an asymmetric Cournot industry, i.e., the fixed fee policy can generate a strictly higher revenue than the auction policy in an industry where prior to the innovation firms are cost-asymmetric.
Year of publication:
2009
Authors: Stamatopoulos, Giorgos ; Tauman, Tami
Published in:
Games and Economic Behavior. - Elsevier, ISSN 0899-8256. - Vol. 67.2009, 1, p. 331-333
Publisher: Elsevier
Keywords: Cost-reducing innovation Asymmetric firms Fixed fee Auction
Type of publication: Article
Source:
Persistent link: https://www.econbiz.de/10005066751
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