Optimal Patent Licensing and Entry Timing——An Endogenous Timing Model with Spatial Price Discrimination
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| Title | Optimal Patent Licensing and Entry Timing——An Endogenous Timing Model with Spatial Price Discrimination
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| Author | Ye Guangliang and Liu Cheng |
| Organization | Renmin University of China；Institute of the Hong Kong and Macao Affairs Office of the State Council |
| Email | gye@ruc.edu.cn；liucheng1353@163.com |
| Key Words | Optimal Patent Licensing; Entry Timing; Spatial Price Discrimination |
| Abstract | This paper investigates the relationship between the timing of entry and the optimal patent licensing for an innovator who holds a transport-cost-reducing innovation in a spatial price discrimination context. We demonstrate that it is never optimal for an innovator to license via a fixed fee, but it often licenses via royalty when the innovation is small. We also find that the range of licensing by a royalty is negatively associated with the degree of timing advantage. In addition, we show that with a single simultaneous pre-game delay stage, the resulting endogenous timing has the innovator to be a market follower. |
| Serial Number | WP609 |
| Time | 2014-08-05 |
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