Patent strength and optimal two-part tariff licensing with a potential rival

We investigate a two-part tariff licensing contract that enables an incumbent innovator to license the technology for a new product to a potential rival, who may alternatively develop a compatible technology for an imperfectly substitutable product. We identify the optimal two-part tariff licensing contract based on the development cost incurred by the rival, the market parameter, and the substitution coefficient.

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Year of publication:	2014
Authors:	Kitagawa, Tatsuya ; Masuda, Yasushi ; Umezawa, Masashi
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 123.2014, 2, p. 227-231
Publisher:	Elsevier
Subject:	Licensing \| Two-part tariff \| Incumbent innovator \| Differentiated Cournot duopoly \| Patent strength

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Type of publication:	Article
Classification:	D21 - Firm Behavior ; D45 - Rationing; Licensing ; L19 - Market Structure, Firm Strategy, and Market Performance. Other
Source:	RePEc - Research Papers in Economics

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