Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92885
Authors: 
Matsumura, Toshihiro
Matsushima, Noriaki
Year of Publication: 
2010
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 775
Abstract: 
Innovators who have developed advanced technologies, along with launching new products by themselves, often license these technologies to their rivals. When a firm launches a new product, product positioning is also an important matter. Using a standard linear city model with two firms, we investigate how the bargaining power of the licenser affects the product positions of the firms. We find that the inventor more likely chooses the central position when its bargaining power is weak. We also discuss the welfare implication. We find that the inverse U shape relationship between the bargaining power of the licenser and total social surplus, i.e., neither too strong nor too weak bargaining power of the licensor is optimal.
Subjects: 
licensing
oligopoly
R&D
location
bargaining
JEL: 
L13
O32
R32
Document Type: 
Working Paper

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