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...

Considering the licensing of a drastic cost-reducing innovation by an outside innovator in an n-firm Cournot oligopoly, we show that when the innovator uses combinations of fees and royalties, there are either n - 1 or n optimal licensing policies.