Optimal licensing under incomplete information: the case of the inside patent holder

Cuihong Fan; Byoung Heon Jun; Elmar G. Wolfstetter

doi:10.1007/s00199-017-1077-5

Optimal licensing under incomplete information: the case of the inside patent holder

Cuihong Fan, Byoung Heon Jun, Elmar G. Wolfstetter

Department of Economics

Research output: Contribution to journal › Article › peer-review

10 Citations (Scopus)

Abstract

We reconsider the inside patent holders’ optimal licensing problem of non-drastic and (super-) drastic innovations under incomplete information, taking into account restrictions concerning royalty rates and the use of exclusive licenses implied by antitrust rules. We employ methods developed in the analysis of license auctions with downstream interaction and optimal control theory. Our analysis differs from the literature which assumed particular patterns of cost reductions across firms induced by the innovation and either complete information or particular probability distributions.

Original language	English
Pages (from-to)	979-1005
Number of pages	27
Journal	Economic Theory
Volume	66
Issue number	4
DOIs	https://doi.org/10.1007/s00199-017-1077-5
Publication status	Published - 2018 Dec 1

Keywords

Asymmetric information
Innovation
Licensing
Optimal contracts

ASJC Scopus subject areas

Economics and Econometrics

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10.1007/s00199-017-1077-5

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abstract = "We reconsider the inside patent holders{\textquoteright} optimal licensing problem of non-drastic and (super-) drastic innovations under incomplete information, taking into account restrictions concerning royalty rates and the use of exclusive licenses implied by antitrust rules. We employ methods developed in the analysis of license auctions with downstream interaction and optimal control theory. Our analysis differs from the literature which assumed particular patterns of cost reductions across firms induced by the innovation and either complete information or particular probability distributions.",

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Optimal licensing under incomplete information: the case of the inside patent holder

Abstract

Keywords

ASJC Scopus subject areas

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