Licensing Under Network Externalities* Licensing Under Network Externalities.

• Autores: Kuang-cheng Andy Wang, Wen-jung Liang, Chun-hung A. Lin
• Localización: Economic record, ISSN 0013-0249, Vol. 88, Nº. 283, 2012, págs. 585-593
• Idioma: inglés
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• Resumen

  • This paper develops a duopoly model to explore licensing behaviour in the presence of network externalities. Under the assumption that the licensor and the licensee compete in a duopolistic market, we obtain the following results. First, the larger the network-externality effect, the more likely it is that the licensor will prefer fixed-fee licensing to royalty licensing. Second, the larger the network-externality effect, the more likely it is that the optimal royalty rate will be smaller than the reduction in marginal costs from innovation under a royalty licensing arrangement.