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A Cross-Licensing System Discourages R&D Investments In Completely Complementary Technologies

Author

Listed:
  • Makoto Okamura

    (Hiroshima University)

  • Testuya Shinkai

    (Kwansei Gakuin University)

  • Satoru Tanaka

    (Kobe City University of Foreign Studies)

Abstract

We consider the research and development (R&D) investment com petition of duopolistic firms in completely complementary technologies. By "completely complementary technologies," we mean that no firm can produce the goods without both of the technologies. We derive the investments competition equilibria in R&D of the two completely complementary technologies with and without a cross-licensing system. By comparing R&D investment levels in the two equilibria, we show that the cross-licensing system discourages the R&D invest ments when the duopolistic firms produce goods by using the two completely complementary technologies.

Suggested Citation

  • Makoto Okamura & Testuya Shinkai & Satoru Tanaka, 2005. "A Cross-Licensing System Discourages R&D Investments In Completely Complementary Technologies," Discussion Paper Series 27, School of Economics, Kwansei Gakuin University, revised Sep 2005.
    • Handle: RePEc:kgu:wpaper:27
    as

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    References listed on IDEAS

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    Cited by:

    1. Testuya Shinkai & Satoru Tanaka & Makoto Okamura, 2005. "Licensing and R&D Investment of Duopolistic Firms with Partially Complementary Technologies," Discussion Paper Series 25, School of Economics, Kwansei Gakuin University, revised Mar 2005.

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    More about this item

    Keywords

    completely complementary technologies; cross-licensing system; R&D investments;
    All these keywords.

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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