By adjusting the strength of IPRs protection, the government can change the extent of knowledge spillovers in R&D. A large spillover rate helps to improve the productivity of the less efficient firms and save on the overall production costs. But, at the same time, it reduces the innovator's...

In a duopoly with symmetric product differentiations, we prove that profit-sharing licensing and per-unit royalty licensing are equivalent to each other regarding both the profitability and the welfare influences.

type="main" <p>In this paper, we discuss the optimal public policy towards two-part tariff licensing, under the assumption that the government intervenes in licensing by setting an upper limit on the royalty level. Compared with the traditional constraint on licensing, the new derived licensing...</p>