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Mixed Competition and Patent Licensing
Author(s) -
Chang RayYun,
Lin YanShu,
Hu JinLi
Publication year - 2015
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/1467-8454.12052
Subject(s) - cournot competition , bertrand competition , bertrand paradox (economics) , licensee , tariff , competition (biology) , economics , microeconomics , insider , industrial organization , oligopoly , license , international trade , computer science , ecology , political science , law , biology , operating system
This paper studies the patent licensing decision of an insider patentee when two firms engage in a mixed (Cournot–Bertrand or Bertrand–Cournot) competition where one firm adopts the quantity strategy while the other uses the price strategy and vice versa. If either the fixed fee or royalty is applied, then the licensor prefers the fixed fee when the licensor takes the quantity strategy, while the licensee uses the price strategy (Cournot–Bertrand). If the two‐part tariff is applied, then the two‐part tariff is more likely to be adopted by the licensor under Cournot–Bertrand than under Bertrand–Cournot competition.