We show the effects of product differentiation and product market competition on technology licensing by an outside innovator. For a certain range of product differentiation, both the innovator and the society prefer royalty licensing compared to auction (or fixed-fee), irrespective of Cournot...

We show the effects of product differentiation and competition on technology licensing by an outside innovator. Both the innovator and the society are better off under royalty licensing compared to auction (or fixed-fee) if the number of potential licensees is sufficiently large, irrespective of...

Our analysis provides a rationale for the existence of a positive fixed-fee and output royalty in the licensing contracts. In this article, we show that the preference functions play an important role in this respect. As the market expansion effect gets weaker, it reduces the possibility of a...