IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v116y2012i2p183-185.html
   My bibliography  Save this article

Free licensing to boost aggregate odds for success

Author

Listed:
  • Sorek, Gilad

Abstract

We show how technological leader gains from inviting an entrant into R&D competition to improve over existing patented technology, as the entrant takes complementary R&D effort, and the demand for both current and improved technologies is increasing with aggregate probability for successful quality improvement.

Suggested Citation

  • Sorek, Gilad, 2012. "Free licensing to boost aggregate odds for success," Economics Letters, Elsevier, vol. 116(2), pages 183-185.
    • Handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:183-185
    DOI: 10.1016/j.econlet.2012.02.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512000535
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2012.02.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    2. Joseph Farrell & Nancy T. Gallini, 1988. "Second-Sourcing as a Commitment: Monopoly Incentives to Attract Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(4), pages 673-694.
    3. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635, December.
    4. Gallini, Nancy T, 1984. "Deterrence by Market Sharing: A Strategic Incentive for Licensing," American Economic Review, American Economic Association, vol. 74(5), pages 931-941, December.
    5. Ted O'Donoghue & Suzanne Scotchmer & Jacques‐François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, March.
    6. Katharine E. Rockett, 1990. "Choosing the Competition and Patent Licensing," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 161-171, Spring.
    7. Andrea Shepard, 1987. "Licensing to Enhance Demand for New Technologies," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 360-368, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Wei & Lyu, Gaoyan & Cui, Wei & Li, Yongjian, 2021. "Strategic technology commercialization in the supply chain under network effects," International Journal of Production Economics, Elsevier, vol. 231(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rockett, Katharine, 2010. "Property Rights and Invention," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 315-380, Elsevier.
    2. Mericcan Usta & Feryal Erhun & Warren H. Hausman, 2014. "Supply licensing when the manufacturer strategically commits to invest in R&D," Naval Research Logistics (NRL), John Wiley & Sons, vol. 61(4), pages 341-350, June.
    3. Cabaleiro, Goretti, 2019. "Sources of appropriation capacity in licensing agreements," Technovation, Elsevier, vol. 86, pages 48-61.
    4. Almeida Costa, Luis & Dierickx, Ingemar, 2002. "Licensing and bundling," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 251-267, February.
    5. Jean-François Sattin, 2016. "Exploring the survival of patent licensing: some evidence from French foreign agreements," The Journal of Technology Transfer, Springer, vol. 41(3), pages 610-630, June.
    6. Pradeep K. Chintagunta & Marco Shaojun Qin & Maria Ana Vitorino, 2018. "Licensing and Price Competition in Tied-Goods Markets: An Application to the Single-Serve Coffee System Industry," Marketing Science, INFORMS, vol. 37(6), pages 883-911, November.
    7. Aidan Hollis, 2002. "Strategic Implications of Learning by Doing," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(2), pages 157-174.
    8. Gambardella, Alfonso & Giuri, Paola & Luzzi, Alessandra, 2007. "The market for patents in Europe," Research Policy, Elsevier, vol. 36(8), pages 1163-1183, October.
    9. Nancy Gallini, 2011. "Private agreements for coordinating patent rights: the case of patent pools," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(3), pages 5-30.
    10. Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
    11. Josh Lerner, 2005. "The Scope of Open Source Licensing," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(1), pages 20-56, April.
    12. Yongmin Chen & Shiyuan Pan & Tianle Zhang, 2018. "Patentability, R&D Direction, And Cumulative Innovation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(4), pages 1969-1993, November.
    13. Johnson, Justin P., 2014. "Defensive publishing by a leading firm," Information Economics and Policy, Elsevier, vol. 28(C), pages 15-27.
    14. Chen, Yijuan, 2012. "Innovation frequency of durable complementary goods," Journal of Mathematical Economics, Elsevier, vol. 48(6), pages 407-421.
    15. Anna Laura Baraldi & Claudia Cantabene & Giulio Perani, 2014. "Reverse causality in the R&D-patents relationship: an interpretation of the innovation persistence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(3), pages 304-326, April.
    16. Panebianco, Fabrizio & Verdier, Thierry & Zenou, Yves, 2016. "Innovation, Pricing and Targeting in Networks," CEPR Discussion Papers 11398, C.E.P.R. Discussion Papers.
    17. Marjit, Sugata & Beladi, Hamid & Kabiraj, Tarun, 2007. "Brand name collaboration and optimal tariff," Economic Modelling, Elsevier, vol. 24(4), pages 636-647, July.
    18. Nalin Kulatilaka & Lihui Lin, 2006. "Impact of Licensing on Investment and Financing of Technology Development," Management Science, INFORMS, vol. 52(12), pages 1824-1837, December.
    19. Baudry Marc & Hervouet Adrien, 2016. "Innovation in the Seed Market: The Role of IPRs and Commercialization Rules," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 51-68, May.
    20. Kiedaisch, Christian, 2015. "Intellectual property rights in a quality-ladder model with persistent leadership," European Economic Review, Elsevier, vol. 80(C), pages 194-213.

    More about this item

    Keywords

    Invited competition; Technology licensing; Complementary R&D;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:183-185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.