Abstract
This paper analyses an optimal two-part licensing scheme based on ad valorem royalties within a differentiated Bertrand duopoly where the innovator is also the downstream producer, and compares it with the optimal two-part per-unit royalty mechanism. After showing that the optimal two-part ad valorem licensing scheme reduces to a pure ad valorem royalty scheme, we show that per-unit contracts are typically preferred to ad valorem contracts by the patentee, as, under price competition, the per-unit royalty has a stronger strategic effect than the ad valorem royalty. In contrast, welfare is higher under the ad valorem contract than under the per-unit mechanism.
Lingua originale | English |
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pagine (da-a) | 1-16 |
Numero di pagine | 16 |
Rivista | Manchester School |
DOI | |
Stato di pubblicazione | Pubblicato - 2015 |
Keywords
- patent licensing