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Impact of technology development costs on licensing form in a differentiated Cournot duopoly
Author(s) -
Kitagawa Tatsuya,
Masuda Yasushi,
Umezawa Masashi
Publication year - 2020
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/ijet.12175
Subject(s) - cournot competition , duopoly , product innovation , industrial organization , product (mathematics) , scheme (mathematics) , new product development , product differentiation , economics , microeconomics , process (computing) , business , computer science , management , mathematics , mathematical analysis , geometry , operating system
We investigate how the type of innovation, either of product or process, influences the licensing scheme. For product innovation, we consider a licensing scheme for a patent holder of a new product facing a potential rival who may invest in technology innovation and enter the market for the new product. The alternative forms of licensing schemes considered are fixed fees and royalties. We then compare this licensing scheme for product innovation with that for process innovation studied in the literature.