Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315868 
Year of Publication: 
2024
Citation: 
[Journal:] Economic Theory Bulletin [ISSN:] 2196-1093 [Volume:] 12 [Issue:] 1 [Publisher:] Springer International Publishing [Place:] Cham [Year:] 2024 [Pages:] 17-24
Publisher: 
Springer International Publishing, Cham
Abstract: 
It is commonly believed that licensing of cost reducing technology increases welfare. We show that technology licensing by an outside innovator may reduce welfare when the technology is not useful for all final goods producers. Technology licensing reduces welfare if cost reduction by the licensed technology is small and the initial cost difference of the final goods producers is large. A higher intensity of competition, either due to lower product differentiation or due to Bertrand competition instead of Cournot competition, increases the possibility of welfare reducing licensing.
Subjects: 
Auction
Fixed-fee
Outside innovator
Technology licensing
Welfare
JEL: 
D44
D45
L13
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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