Fee versus royalty reconsidered

For an outsider innovator in a Cournot oligopoly, royalty licensing could be superior to both fixed fee and auction. The result depends on a simple fact that has been overlooked in the existing literature, namely, the number of licenses can take only integer values.

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Bibliographic Details
Published in:Games and economic behavior 2005-10, Vol.53 (1), p.141-147
Main Author: Sen, Debapriya
Format: Article
Language:English
Subjects:
Auction
Auctions
Exact k-drastic innovation
Game theory
Imperfect information
k-drastic innovation
Licences
Licensing
Market theory
Microeconomics
Oligopoly
Royalties
Royalty
Studies
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Description
Summary:For an outsider innovator in a Cournot oligopoly, royalty licensing could be superior to both fixed fee and auction. The result depends on a simple fact that has been overlooked in the existing literature, namely, the number of licenses can take only integer values.
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2004.09.005