Bargaining in Patent Licensing Negotiations under Stochastic Environments: An Experimental Study

Experiments of a bargaining game between licensors and licensees were conducted. The main treatment is to introduce a “second-chance” negotiation for licensors in a context of ultimatum game. The experimental results reveal that the introduction of the “second-chance” negotiation for licensors has significant impacts on behaviors of the licensors and licensees. This “second-chance” negotiation for licensors essentially increases the average offers made by the licensees, expected willingness-to-accept of the licensors, and offers accepted by the licensors. The market efficiency of patent transaction is improved since the rates of acceptance are strikingly raised. The licensors would be the main beneficiary with this additional opportunity.