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Technology selling and innovation with bargaining
Author(s) -
Banerjee Swapnendu,
Lu Yuanzhu,
Poddar Sougata
Publication year - 2021
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/boer.12235
Subject(s) - incentive , industrial organization , economics , technology innovation , microeconomics , business , marketing
We examine when the price of technology is found through bargaining between the seller and the buyer and explore its effect on the innovation incentive. Selling the technology is preferred to licensing for the innovating firm. The possibility of selling increases the incentive for innovation compared to licensing for a range of high‐cost innovation, but reduces the incentive for a range of low‐cost innovation.