Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/93820 
Year of Publication: 
2007
Series/Report no.: 
SFB/TR 15 Discussion Paper No. 199
Publisher: 
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY), München
Abstract: 
This paper revisits the licensing of a non-drastic process innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines a restrictive license auction with royalty licensing. This mechanism is more profitable than standard license auctions, auctioning royalty contracts, fixed-fee licensing, pure royalty licensing, and two-part tariffs. The key features are that royalty contracts are auctioned and that losers of the auction are granted the option to sign a royalty contract. Remarkably, combining royalties for winners and losers makes the integer constraint concerning the number of licenses irrelevant.
Subjects: 
patents
licensing
auctions
royalty
innovation
R&D
mechanism design
JEL: 
D21
D43
D44
D45
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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