Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93941
Authors: 
Giebe, Thomas
Wolfstetter, Elmar G.
Year of Publication: 
2006
Series/Report no.: 
SFB/TR 15 Discussion Paper 96
Abstract: 
This paper revisits the standard analysis of licensing a cost reducing innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines elements of a license auction with royalty licensing by granting the losers of the auction the option to sign a royalty contract. The optimal new mechanism eliminates the losses from exclusionary licensing without reducing bidders' surplus; therefore, it is more profitable than both standard license auctions and pure royalty licensing. We also take into account that the number of licenses must be an integer, which is typically ignored in the literature.
Subjects: 
Patents
Licensing
Auctions
Royalty
Innovation
R&D
Mechanism Design
JEL: 
D21
D43
D44
D45
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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