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Technology selling and innovation with bargaining

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  • Swapnendu Banerjee
  • Yuanzhu Lu
  • Sougata Poddar

Abstract

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.

Suggested Citation

  • Swapnendu Banerjee & Yuanzhu Lu & Sougata Poddar, 2021. "Technology selling and innovation with bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 73(1), pages 100-107, January.
    • Handle: RePEc:bla:buecrs:v:73:y:2021:i:1:p:100-107
    DOI: 10.1111/boer.12235
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    References listed on IDEAS

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    1. Mukherjee, Arijit, 2006. "Patents and R&D with imitation and licensing," Economics Letters, Elsevier, vol. 93(2), pages 196-201, November.
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    4. Prabal Roy Chowdhury, 2005. "Patents and R & D: The tournament effect," Discussion Papers 05-05, Indian Statistical Institute, Delhi.
    5. Mukherjee, Arijit & Mukherjee, Soma, 2013. "Technology licensing and innovation," Economics Letters, Elsevier, vol. 120(3), pages 499-502.
    6. Lu, Yuanzhu & Banerjee, Swapnendu & Poddar, Sougata, 2019. "Technology licensing and innovation—A correction on two-part tariff analysis," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    7. Tauman, Yair & Weng, Ming-Hung, 2012. "Selling patent rights and the incentive to innovate," Economics Letters, Elsevier, vol. 114(3), pages 241-244.
    8. Cristina Odasso & Giuseppe Scellato & Elisa Ughetto, 2015. "Selling patents at auction: an empirical analysis of patent value," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(2), pages 417-438.
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