Optimal bid disclosure in patent license auctions under alternative modes of competition

Cuihong Fan, Byoung Heon Jun, Elmar G. Wolfstetter

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


The literature on patent license auctions in oligopoly assumed that the auctioneer reveals the winning bid and stressed that this gives firms an incentive to bid high in order to signal an aggressive output strategy in a downstream Cournot market game, and conversely bid low to signal acquiescent pricing in a Bertrand market game. The present paper examines the information revealed by publishing the winning or the losing or no bid, assuming an oligopoly with differentiated goods. We rank disclosure rules and find that it is not optimal for the innovator to disclose the winning bid, regardless of the mode of competition.

Original languageEnglish
Pages (from-to)1-32
Number of pages32
JournalInternational Journal of Industrial Organization
Publication statusPublished - 2016 Jul 1

Bibliographical note

Funding Information:
This paper replaces Fan et al. (2014b ) where we analyze optimal bid disclosure in the special case of Cournot competition with perfect substitutes. We thank an anonymous referee, Emmanuelle Auriol, Richard J. Gilbert, Vijay Krishna, and Giancarlo Spagnolo for comments and suggestions. Research support by Korea University, the Deutsche Forschungsgemeinschaft (DFG), SFB Transregio 15, “Governance and Efficiency of Economic Systems”, and the National Natural Science Foundation of China (grant: 71371116 ) is gratefully acknowledged.

Publisher Copyright:
© 2016 Elsevier B.V. All rights reserved.


  • Auctions
  • Innovation
  • Licensing

ASJC Scopus subject areas

  • Industrial relations
  • Aerospace Engineering
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management
  • Industrial and Manufacturing Engineering


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