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Fees versus Royalties under Partial Cross Ownership

Author

Listed:
  • Hsiao-chi Chen

    (National Taipei University)

  • Shiou Shieh

    (National Taipei University)

  • Pu-ti Su

    (National Taipei University)

Abstract

This paper studies an independent patent-holder's licensing of a process innovation to a Cournot duopoly characterized by partial cross ownership. We find that royalty licensing is preferred by the patentee when the degree of cross ownership is high, whereas fixed fee licensing is preferred when the degree of cross ownership is low. When the degree of cross ownership is in the intermediate range, the superiority of fixed fee and royalty licensing depends on the magnitude of the innovations.

Suggested Citation

  • Hsiao-chi Chen & Shiou Shieh & Pu-ti Su, 2010. "Fees versus Royalties under Partial Cross Ownership," Economics Bulletin, AccessEcon, vol. 30(4), pages 3248-3259.
    • Handle: RePEc:ebl:ecbull:eb-10-00530
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I4-P299.pdf
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    References listed on IDEAS

    as
    1. Inés Macho-Stadler & Thierry Verdier, 1991. "Strategic managerial incentives and cross ownership structure: A note," Journal of Economics, Springer, vol. 53(3), pages 285-297, October.
    2. X. Henry Wang & Bill Yang, 2004. "On Technology Transfer to an Asymmetric Cournot Duopoly," Economics Bulletin, AccessEcon, vol. 4(14), pages 1-6.
    3. Henry Wang, X., 2002. "Fee versus royalty licensing in a differentiated Cournot duopoly," Journal of Economics and Business, Elsevier, vol. 54(2), pages 253-266.
    4. Beggs, A. W., 1992. "The licensing of patents under asymmetric information," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 171-191, June.
    5. Ana I. Saracho, 2002. "Patent Licensing Under Strategic Delegation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(2), pages 225-251, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Shuai Niu & Meiling Wang, 2022. "Partial acquisition and patent licensing in an asymmetric duopoly," Manchester School, University of Manchester, vol. 90(1), pages 92-105, January.

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    More about this item

    Keywords

    Fixed fee licensing; Royalty licensing; Partial cross ownership; Cross-shareholding; Cournot duopoly;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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